Deck 14: Managing Retailing, Wholesaling, and Logistics

Question 1

Electronic shopping is a type of ________.

A) direct selling
B) network marketing
C) multilevel selling
D) corporate selling
E) direct marketing

Answer 1

E

Question 2

Which of the following is true for self-service retailing?

A) These retailers carry more shopping goods and services such as credit and merchandise-return privileges.
B) This service model is favored by discount stores and customers who want to save money.
C) It results in high staffing costs compared to other forms of retailing.
D) Salespeople are ready to assist in every phase of the "locate-compare-select" process.
E) Customers need more information and assistance than in other forms of retailing.

Answer 2

B

Question 3

Which of the following is an example of direct marketing?

A) E&OE sells its herbal skincare products exclusively through its stand-alone stores.
B) TCJ is a telemarketing firm that sells products from a number of different suppliers.
C) Jayne's sells most of its products to customers through home sales parties.
D) J3 is a storeless retailer that organizes the retail activity of the employees of four firms.
E) Reynold's tries to minimize its staff costs by installing vending machines in its stores.

Answer 3

B

Question 4

A factory outlet is an example of a(n)________ retailer.

A) off-price
B) specialty
C) discount
D) department
E) catalog

Question 5

________ includes all the activities in selling goods or services directly to final consumers for personal, nonbusiness use.

A) Wholesaling
B) Retailing
C) Procurement
D) Promoting
E) Warehousing

Question 6

Which of the following is an example of a limited service retailer?

A) Customers at TAB pick out the products they want and pay at the checkout counter.
B) Salespeople at Eli are always on hand to offer shoppers advice and assistance in choosing products.
C) Mina's allows customers to check out their own purchases in order to reduce the staff count.
D) As CLO's offers a number of merchandise-return privileges, customers need information and assistance while shopping.
E) Alison's stocks a number of specialty products and the store's salespeople generally help shoppers with all their needs.

Question 7

E&OE produces and markets its own brand of skincare products using herbal remedies and natural ingredients through standalone stores as well as an online portal.E&OE is a(n)________ retailer.

A) off-price
B) specialty
C) discount
D) department
E) extreme value

Question 8

In ________ retailing,salespeople are ready to assist in every phase of the "locate-compare-select" process.

A) self-service
B) self-selection
C) full-service
D) limited service
E) limited-selection

Question 9

Which of the following is true of store retailers?

A) A hard-discount store offers a wider merchandise mix than discount stores at higher prices.
B) A discount store offers leftover goods, overruns, irregular merchandise sold at less than retail.
C) A specialty store generally stocks a very narrow product line.
D) An extreme value store generally has a broad selection of high-markup, brand-name goods.
E) A catalog showroom is a large, low-cost, low-margin, high-volume, self-service store.

Question 10

A(n)________ is a storeless retailer serving a specific clientele-usually employees of large organizations-who are authorized to buy from a list of retailers that have agreed to give discounts in return for inclusion on the list.

A) direct-selling vendor
B) direct marketing vendor
C) buying service
D) automatic vendor
E) corporate retailer

Question 11

Bill and Josh are considering opening a retail store.They have identified their target market and location and are finalizing the details of the merchandise they will carry.Since the neighborhood is rundown and the customers in the area are very price-conscious,Bill and Josh want to offer goods from well-known brands,but at lower rates than the full retail prices of the products.They choose to stock excess production from manufacturers or goods that have remained unsold at other retailers.This is a description of a(n)________ retailer.

A) off-price
B) specialty
C) discount
D) department
E) catalog

Question 12

Reynold's is a grocery chain that has always catered to mid-market customers.However,the owner,Mal,has noticed that an influx of new residents are buying mostly the lower-cost products and products on discount.To attract customers,Mal decides to make a gradual switch to the discount store format,but to do this,he will have to cut costs wherever possible.Which of the following types of service should Mal avoid in order to lower costs?

A) limited service
B) self-selection
C) full-service
D) self-service
E) limited selection

Question 13

Telemarketing is a type of ________.

A) direct selling
B) network marketing
C) multilevel selling
D) close-range marketing
E) direct marketing

Question 14

In the ________ type of retailing,customers usually find their own goods,although they can ask salespeople for assistance.

A) self-service
B) self-selection
C) full service
D) limited service
E) limited-selection

Question 15

Discount stores that try to keep prices as low as possible are more likely to function using ________ operations.

A) limited service
B) self-selection
C) full-service
D) self-service
E) limited selection

Question 16

H&A is a retail chain that specializes in selling goods at very low prices.To achieve this,it stocks a very narrow assortment of basic necessities and offers customers a "no-frills" shopping experience.H&A is an example of a(n)________ store.

A) off-price
B) specialty
C) hard-discount
D) superstore
E) convenience

Question 17

Staples is a giant retailer that concentrates on selling office supplies.Staples is an example of a(n)________.

A) ambush marketer
B) supercenter
C) megamarketer
D) category killer
E) guerilla marketer

Question 18

An independent retailer using a central buying organization and joint promotion efforts with other retailers is part of a ________.

A) corporate chain store
B) voluntary chain
C) retailer cooperative
D) merchandising conglomerate
E) franchise organization

Question 19

A ________ is a retail firm owned by its customers.Members contribute money to open their own store,vote on its policies,elect a group to manage it,and receive dividends.

A) retailer cooperative
B) voluntary chain
C) consumer cooperative
D) merchandising conglomerate
E) franchise organization

Question 20

A ________ is a wholesaler-sponsored group of independent retailers engaged in bulk buying and common merchandising.

A) retailer cooperative
B) voluntary chain
C) consumer cooperative
D) merchandising conglomerate
E) franchise organization

Question 21

A brand developed by a retailer and/or wholesaler that is available only in selected retail outlets is called a ________ brand.

A) generic
B) franchisee
C) marque
D) national
E) private-label

Question 22

________ sell and deliver a limited line of semiperishable goods to supermarkets,grocery stores,hospitals,restaurants,and hotels.

A) Producers' cooperatives
B) Cash and carry wholesalers
C) Truck wholesalers
D) Drop shippers
E) Rack jobbers

Question 23

In addition to its store brands and nationally well-known brands of detergents,Reynold's also carries much cheaper varieties of detergents that are not advertised and have little-known names.They are often manufactured from lower-quality ingredients and save on packaging and advertising costs.These are known as ________.

A) Common carriers
B) Shills
C) Generics
D) Private labels
E) Marques

Question 24

Which of the following is an ancillary service offered by retailers?

A) accepting orders over the telephone
B) advertising and window displays
C) delivery to the customer's doorstep
D) general information
E) alterations and tailoring

Question 25

________ are unbranded,plainly packaged,less expensive versions of common products such as spaghetti,paper towels,and canned peaches.

A) Common carriers
B) Shills
C) Generics
D) Private labels
E) Marques

Question 26

Which of the following is a prepurchase service offered by retailers?

A) accepting orders over the telephone
B) shipping the product
C) delivery to the customer's doorstep
D) general information
E) interior decoration of the retail outlet

Question 27

________ are independently owned businesses that take title to the merchandise they handle.They are full-service and limited-service jobbers,distributors,and mill supply houses.

A) Brokers
B) Agents
C) Merchant wholesalers
D) Specialized wholesalers
E) Retailers' branches

Question 28

In your neighborhood there is a small men's store that has a limited selection of clothing,but the selection that is carried is of very high quality and price.Services include free alterations and tailoring,personalized record keeping,and free dry cleaning.The inside of the store has deep leather chairs and couches and thick pile carpet.Upon entering the store,a customer feels "special and rich." In terms of differentiation,what is this retailer trying to communicate by its decorations and service level?

A) differentiation based on services mix and atmosphere
B) differentiation based on prepurchase services
C) differentiation based on postpurchase services and atmosphere
D) differentiation based on ancillary services and atmosphere
E) differentiation based on prepurchase and postpurchase services

Question 29

Agricultural assemblers,petroleum bulk plants and terminals,and auction companies are examples of ________.

A) full-service wholesalers
B) specialized wholesalers
C) limited-service wholesalers
D) merchant wholesalers
E) brokers

Question 30

Which of the following is the strongest differentiator for brick-and-mortar stores who want to emphasize their superiority over online retailers?

A) product quality
B) the shopping experience
C) product range
D) pricing
E) the retailer's reputation

Question 31

A store selling expensive artwork and luxury goods typically falls into the ________ group with respect to margins and volume.

A) mixed markup, high-volume
B) low-volume, mixed markup
C) low-volume, low-markup
D) high-volume, low-markup
E) high-markup, low-volume

Question 32

Which of the following is true for direct product profitability analysis?

A) It is highly correlated with the gross margin on a product.
B) It is negligible compared to the gross margin on a product.
C) It bears little relation to the gross margin on a product.
D) It is significantly lower than the gross margin on a product.
E) It is exactly the same as the gross margin on a product.

Question 33

Though it is sold only in Wal-Mart stores,Wal-Mart's Ol'Roy dog food has surpassed Nestlé's Purina brand as the top-selling dog food.Ol'Roy is an example of a ________.

A) generic product
B) national brand
C) franchise
D) copy-cat brand
E) private label

Question 34

Which of the following is true of brokers?

A) Brokers represent buyers or sellers on a semipermanent basis.
B) Most brokers are small businesses with a few skilled salespeople.
C) Brokers bring buyers and sellers together and assist in negotiation.
D) Selling brokers have contractual authority to sell a manufacturer's entire output.
E) Purchasing brokers make purchases for buyers and often receive, inspect, warehouse, and ship merchandise.

Question 35

________ includes all the activities in selling goods or services to those who buy for resale or business use.

A) Retailing
B) Wholesaling
C) Procurement
D) Promoting
E) Warehousing

Question 36

________ serve bulk industries such as coal,lumber,and heavy equipment,assuming title and risk from the time an order is accepted to its delivery.

A) Producers' cooperatives
B) Cash and carry wholesalers
C) Truck wholesalers
D) Drop shippers
E) Rack jobbers

Question 37

Mass merchandisers and discount stores typically fall into the ________ group with respect to margins and volume.

A) mixed markup, high-volume
B) low-volume, mixed markup
C) low-volume, low-markup
D) high-volume, low-markup
E) high-markup, low-volume

Question 38

Most retailers will put low prices on some items in order to increase traffic to the store.These low-priced products are known as ________.

A) loss leaders
B) price ceilings
C) price skimmers
D) price floors
E) cold calls

Question 39

Which of the following is a postpurchase service offered by retailers?

A) accepting orders over the telephone
B) advertising and window displays
C) delivery to the customer's doorstep
D) general information
E) interior decoration of the retail outlet

Question 40

Because shelf space is scarce,many supermarkets now charge a ________ for accepting a new brand,to cover the cost of listing and stocking it.

A) retainer
B) slotting fee
C) residual fee
D) contingent fee
E) royalty

Question 41

Beyond the optimal order quantity,total cost per unit increases because ________.

A) inventory-carrying cost per unit increases
B) inventory-carrying cost per unit decreases
C) order-processing cost per unit increases
D) order-processing cost per unit increases though inventory cost decreases
E) inventory-processing cost per unit falls slowly

Question 42

An item described as low-risk and low-opportunity is a ________.

A) nuisance item
B) bottleneck item
C) variable item
D) critical item
E) commodities

Question 43

The elapsed time between an order's receipt,delivery,and payment is called the ________.

A) variable-costs-to-payment cycle
B) product-to-payment cycle
C) inventory-to-sale cycle
D) order-to-inventory cycle
E) order-to-payment cycle

Question 44

"Pop-up" stores let retailers promote brands to seasonal shoppers for a limited time.

Question 45

The trucking firm hired by your transportation manager provides a trucking service between the city of Sacramento and the surrounding towns on a regular schedule and at fixed prices.The trucking firm saves transportation costs by transporting the goods using trains as well as trucks,instead of trucks alone.Your transportation manager has hired a(n)________.

A) airship carrier
B) airtruck carrier
C) trainship carrier
D) fishyback carrier
E) piggyback carrier

Question 46

Discount stores usually stock leftover goods,overruns,and irregular merchandise,sold at less than retail.

Question 47

________ consists of putting goods in boxes or trailers that are easy to transfer between two transportation modes.

A) Containerization
B) Haulage
C) Inventory carrying
D) Order processing
E) Warehousing

Question 48

As inventory draws down,management must know at what stock level to request additional stock.This stock level is called the ________.

A) reorder point
B) least fixed point
C) point of divergence
D) inflection point
E) critical point

Question 49

Companies are reducing their inventory costs by treating inventory items differently,positioning them according to risk and opportunity.High-risk,low-opportunity items are known as ________.

A) nuisance items
B) bottleneck items
C) variable items
D) critical items
E) commodities

Question 50

E&OE is trying to minimize its inventory costs,which are extremely high.The company has realized that it can achieve this by maintaining a near-zero inventory and producing only once a product is ordered.Which of the following will be true for E&OE?

A) Short production runs will be more expensive than longer ones.
B) Setup and order-processing costs will be high.
C) The order point will be high.
D) Order-processing costs will be lower than the inventory-carrying costs.
E) E&OE can reduce the average cost per unit by producing a long run.

Question 51

If the shipper owns its own truck or air fleet,it becomes a ________.

A) containerized carrier
B) private carrier
C) contract carrier
D) common carrier
E) diversified carrier

Question 52

HCN recently introduced a product that the distributor considers a "bottleneck" item.What is the risk/opportunity relationship for bottleneck items?

A) low risk, mediocre opportunity
B) low risk, high opportunity
C) low risk, low opportunity
D) high risk, mediocre opportunity
E) high risk, low opportunity

Question 53

E&OE is trying to minimize its inventory costs,which are extremely high.The company has realized that it can achieve this by maintaining a near-zero inventory and producing more only once a product is ordered.Which of the following is true for E&OE?

A) Inventory costs are lower than order-processing costs.
B) Running costs are higher than inventory-carrying costs.
C) Setup costs for the products are low.
D) Order-processing costs are high.
E) Order-processing costs are lower than setup costs.

Question 54

A superstore is a storeless retailer serving a specific clientele who are entitled to buy from a list of retailers that have agreed to give discounts in return for membership.

Question 55

Which of the following is an example of a private carrier?

A) MET is a transporter that operates only in the Chicago area and charges fixed prices.
B) BCL is a family firm that owns only three trucks, but takes small orders for transport.
C) VTV owns a fleet of trucks and transports goods for any client for a fee.
D) COM is a shipping firm that transports goods by road and rail across the U.S.
E) BEL Inc. manufactures parts for automobiles and transports its products to customers itself.

Question 56

A stock order point of 10 means ordering the product ________.

A) every 10 days
B) when stock falls to 10 units
C) every 10 units
D) when stock falls to 9 units
E) in batches of 10 items

Question 57

________ refers to buying large carload lots and dividing them into smaller units before shipping them out to consumers.

A) Bulk breaking
B) Containerization
C) Wholesaling
D) Warehousing
E) Broking

Question 58

Full-service retailers generally have the lowest costs of all retail types.

Question 59

________ costs for a manufacturer consist of setup costs and running costs.

A) Inventory-carrying
B) Containerization
C) Wholesaling
D) Order-processing
E) Transportation

Question 60

Retailing includes all the activities involved in selling goods or services directly to final consumers.

Question 61

The order-processing cost per unit increases with the number of units ordered because the order costs are spread over more units.

Question 62

E&OE is looking to reduce its inventory costs for all its products.The company realizes that its inventory depends on the setup costs of its various products.How do setup costs affect E&OE's inventory costs?

Question 63

Imagine that you are in charge of creating a distinctive store atmosphere at a clothing retailer.What can you do to make your store stand out in the customer experience?

Question 64

The lower price of generics is made possible by lower-cost labeling and packaging and minimal advertising,and sometimes lower-quality ingredients.

Question 65

Retailers can target their customers more effectively by using only a single channel to reach them.

Question 66

Private label or store brands are also known as generics.

Question 67

Differentiate between brokers and agents.

Question 68

Low prices on some items serve as traffic builders or loss leaders for retailers.

Question 69

The gross margin on a product bears a direct relation to the direct product profit.

Question 70

More stocking locations mean goods can be delivered to customers more quickly,and warehousing and inventory costs are lower.

Question 71

Postpurchase services include shipping and delivery,gift wrapping,adjustments and returns.

Question 72

Some high-volume products may have such high handling costs that they are less profitable and deserve less shelf space than low-volume products.

Question 73

Featuring exclusive national brands that are not available at competing retailers is a way of generating consumer interest in a retailer.

Question 74

Wholesaling includes all the activities in selling goods or services to those who buy for resale or
business use.

Question 75

Inventory cost increases at an accelerating rate as the customer-service level approaches 100 percent.

Question 76

Most companies today are trying to increase the order-to-payment cycle.

Question 77

Department stores only face competition from other department stores as other retailing forms are not a threat to their sales and profitability.

Question 78

Reynold's,a supermarket chain,carries the K-Nine range of dog food manufactured by JGB.However,the chain does not interact directly with JGB,but obtains stocks from wholesalers.It has been suggested that Reynold's save costs by sourcing products directly from JGB.However,Mal,the CEO of the Reynold's,insists that wholesalers are the most hassle-free option for Reynold's.What can Mal say to justify this?

Question 79

List and explain the four service levels offered by retailers.

Question 80

Firms are increasingly recognizing the importance of influencing consumers at the point of purchase.