Deck 8: Order Management and Customer Service

Question 1

From a marketing perspective, logistics customer service can be thought of as a feature of the augmented product that adds value for the customer.

Answer 1

True

Question 2

Customer relationship management is a new concept only recently receiving attention.

Answer 2

False

Question 3

A stockout always results in a back order.

Answer 3

False

Question 4

Reserve Inventory and Determine Delivery Date has traditionally been referred to as order processing.

Question 5

What are the steps in the CRM process?

A) Segment customer base, then measure service, and improve
B) Segment customer base, then identify service/package
C) Measure service, then improve
D) Segment customer base, identify service/package, then measure service, and improve

Question 6

Not only does Internet technology speed up the order management process, it increases the velocity of cash back to the selling organization, which is a significant benefit.

Question 7

Taylor's company has been growing rapidly, and she now recognizes that she can no longer serve all of her customers personally. In determining which customer relationships to maintain herself and which to reassign to her new sales assistant, she has recognized that some customers have bought a lot of her products because they allowed her to become deeply involved in their businesses, while other customers don't want a lot of attention and just want to place a few small orders occasionally. Taylor must be taking which step in implementing a CRM process?

A) Segmenting the customer base by profitability
B) Identifying the best product/service package for each customer segment
C) Developing and executing the best processes
D) Measuring performance and continuously improving

Question 8

A driving force behind the attention to OTC cycle variability is safety stock. The absolute length of the order cycle will influence demand inventory.

Question 9

Customer service is anything that touches the customer.

Question 10

Those customers who are in the "Danger Zone" segment are:

A) likely to switch to a competitor.
B) have been a customer for less than a year.
C) the least profitable.
D) are using ABC to drive down the price.

Question 11

There are ten principal activities to the OTC model.

Question 12

Firms today are beginning to use techniques such as activity-based costing to more accurately allocate costs to customers based on the specific costs of servicing a customer's orders relative to how, how much, what, and when a customer orders.

Question 13

Although it is generally impossible for an organization to anticipate customer service failures, employees can be trained to address mistakes quickly when they occur.

Question 14

"Order to cash" and "order cycle" are the same.

Question 15

Customer service is of equal importance to both logistics and marketing.

Question 16

Traditional customer profitability analyses would start with _____ less returns and allowances (net sales) and subtract the cost of goods sold.

A) gross sales
B) back orders
C) the forecast
D) gross margin

Question 17

Activity Based Costing (ABC) allocates costs to activities based on a fixed predetermined measure (e.g., cases).

Question 18

Shelly's data shows that out of the last 100 orders shipped, 92 orders were filled completely and correctly. Of these, 89 were reported as being received on time, but one of them had an inaccurate invoice enclosed. What is Shelly's perfect order rate?

A) 100%
B) 92%
C) 89%
D) 88%

Question 19

With the proper information on how a customer's interaction with the shipper drives the firm's costs, the firm can then segment its customers by profitability.

Question 20

Shondine's car broke down unexpectedly on Monday evening as she was driving home from work. She had it towed to the dealership on Tuesday morning, but the necessary replacement part wasn't in stock. The dealer's service department received the parts order on Wednesday afternoon, and Shondine's car was finally ready for her to pick up on Thursday afternoon, after the new part had been installed. In the car repair industry, these three full days are known as:

A) the order-to-cash cycle.
B) customer wait time.
C) customer cycle time.
D) lead time.

Question 21

Which of the following order cycle lengths would require the buyer to hold the most total inventory during lead time?

A) 10 days, +/- 2 days
B) 10 days, +/- 4 days
C) 8 days, +/- 5 days
D) 9 days, +/- 3 days

Question 22

The term replenishment cycle refers to:

A) orders for raw material.
B) material management.
C) the acquisition of additional inventory.
D) inventory and material management.

Question 23

Compare and contrast the concepts of order-to-cash cycle time and order cycle time.

Question 24

National Sports Apparel manufactures high school and college athletic uniforms for a wide range of team sports, as well as cheerleading uniforms. Nearly every order requires some degree of customization, especially in the numbers and insignias that are printed or sewn onto the uniforms. Which of the following would be an important metric for National Sports to measure?

A) Order cycle time
B) Line fill rate
C) Logistics operations responsiveness
D) Postsale logistics

Question 25

EnviroTech manufactures equipment used for drilling oil. If EnviroTech equipment belonging to one of the firm's customers breaks down on the job, the customer could lose hundreds of thousands of dollars while waiting for the equipment to get back up and running. Thus, an important part of EnviroTech's business is providing replacement parts for the equipment it sells as quickly as possible. Which of the following would be an important metric for EnviroTech to measure?

A) Order cycle time
B) Line fill rate
C) Logistics operations responsiveness
D) Postsale logistics

Question 26

Customer service is often viewed as the primary interface between logistics and marketing. Discuss the nature of this interface and how it might be changing.

Question 27

Explain the impacts of order cycle time length and variability on both buyers and sellers.

Question 28

Define and discuss Activity-Based Costing (ABC), including its impact on profitability.

Question 29

There are two parts to the order management process. The first is _____ and the second is _____.

A) managing the order after it is received; influencing how the customer orders
B) shipping the order; taking the order
C) influencing how the customer orders; managing the order after it is received
D) the Internet model; the traditional model

Question 30

Define and discuss the Order Management System.

Question 31

The SCOR model provides suggested metrics:

A) across multiple dimensions for each of the five Level One processes.
B) for segmenting customers.
C) for proving a base for ABC costing.
D) that allow marketing to evaluate channel selection.

Question 32

Explain how order management and customer service are related.

Question 33

Describe an experience you or someone close to you had in which an organization failed to provide good customer service. Using the key elements of service recovery explained in the text, describe how the organization either applied these elements to rectify the situation or could have used these elements more effectively to rectify the situation.

Question 34

Describe the two phases of order management. How are they different? How are they related?

Question 35

As the level of substitutability for a product increases, its stockout costs to the manufacturer:

A) increase.
B) decrease.
C) stay the same.
D) can't be determined.

Question 36

The traditional role of customer service at the interface between marketing and logistics manifests itself through the _____ dimension of the marketing mix.

A) price
B) place
C) product
D) promotion