Deck 14: Value Chain Management and Logistics

Question 1

Which statement concerning the value chain is NOT correct?

A) There are two aspects of the value chain: the value chain itself and the value delivery chain.
B) The parties in a value chain typically have common goals.
C) Order fulfillment, quality control, and product commercialization are examples of value chain activities.
D) A value chain represents the series of business activities that are performed to design, produce, market, deliver, and service a product.

Answer 1

The parties in a value chain typically have common goals.

Question 2

Which statement concerning a value delivery chain is NOT correct?

A) Value must be added by each participant in a value delivery chain.
B) The consumer is not a part of a value delivery chain.
C) In a value delivery chain, marketers must decide what activities to outsource.
D) Win-win-win is a delivery chain goal.

Answer 2

The consumer is not a part of a value delivery chain.

Question 3

Which of the following is a major distribution planning function?

A) Pricing
B) Inventory management
C) Cost control
D) Promotion

Answer 3

Inventory management

Question 4

Which of these is NOT a channel member?

A) Retailers
B) Manufacturers
C) Consumers
D) Competitors

Question 5

A central component to relationship marketing is

A) a long-term relationship among distribution intermediaries.
B) a written contract among distribution intermediaries.
C) high levels of customer service.
D) an adversarial relationship among distribution intermediaries.

Question 6

Which of these is NOT a channel function?

A) Marketing research
B) Buying
C) Customer contact
D) Customer services

Question 7

The sorting process enables

A) small firms to purchase large quantities of goods.
B) the conflicting goals of manufacturers and consumers to be resolved.
C) small firms to receive high levels of customer service.
D) channel members to be viewed as strategic partners.

Question 8

The assorting element of the sorting process enables

A) small shipments to be transported economically.
B) products to be graded by color, size, and quality.
C) independent distributors to work together to achieve a common goal.
D) consumers to have a broad selection of products.

Question 9

No independent intermediaries are used in which type of distribution channel?

A) Direct
B) Indirect
C) Vertical
D) Horizontal

Question 10

An important characteristic of a direct channel of distribution is

A) a contractual channel arrangement.
B) low capital requirements.
C) a high level of channel control.
D) control over the channel by the dominant channel member.

Question 11

With a contractual channel arrangement,

A) the channel of distribution is direct.
B) the dominant firm in the distribution process plans the marketing program and coordinates the responsibilities of each member.
C) all of the channel members are owned and controlled by the manufacturer.
D) all the terms regarding distribution tasks, prices, and other factors are clearly specified in writing for each member.

Question 12

With an administered channel arrangement,

A) all the terms regarding distribution functions, prices, and other factors are clearly specified in writing.
B) the dominant firm in the distribution process plans the marketing program and itemizes and coordinates each member's duties.
C) all of the channel members are owned and controlled by the manufacturer.
D) the channel of distribution is direct.

Question 13

Channel length refers to the

A) acquisition of companies at another channel stage.
B) diversity of channel members at any level.
C) levels of independent members along a distribution channel.
D) extent of horizontal integration.

Question 14

Vertical integration (such as a manufacturer operating a factory outlet store) enables the manufacturer to

A) shorten its distribution channel.
B) better focus its distribution channel.
C) broaden its distribution channel.
D) lengthen its distribution channel.

Question 15

A major advantage of vertical integration (such as a manufacturer operating a factory outlet store) is that it

A) increases profit margins.
B) reduces markdowns.
C) increases control over other channel members.
D) increases channel length.

Question 16

Channel width refers to the

A) diversity of channel members at any stage of distribution.
B) levels of independent members along a channel.
C) diversity of products carried by any channel member.
D) number of independent channel members at any stage of distribution.

Question 17

Which of these are major characteristics of exclusive distribution?

A) The highest degree of channel control, but limited sales potential
B) Moderate market coverage and difficulty in carving out a distinctive market niche
C) Widespread market coverage and limited channel control
D) Moderate number of distribution intermediaries and good sales and profits

Question 18

Which of these are major characteristics of intensive distribution?

A) The highest degree of channel control, but limited sales potential
B) Moderate market coverage and difficulty in carving out a distinctive market niche
C) Widespread market coverage and limited channel control
D) Moderate number of distribution intermediaries and good sales and profits

Question 19

A firm can most effectively implement a differentiated market segmentation strategy with which distribution strategy?

A) Exclusive distribution
B) Undifferentiated channel strategy
C) Dual channel of distribution
D) Intensive distribution

Question 20

Price policy, conditions of sale, territorial rights, the services/responsibility mix, and contract length and conditions of termination are clearly outlined in

A) horizontal integration.
B) supplier/distribution intermediary contracts.
C) administered channels.
D) vertical integration.

Question 21

Functional discounts reflect deductions from list price for

A) implementing test markets.
B) immediate or early payment.
C) large-volume purchases.
D) performing storage, shipping, and other jobs.

Question 22

A wholesaler can best protect itself from premature termination from a manufacturer through a contract provision stating

A) the length of the supplier/distribution intermediary contract.
B) the role of full-line forcing.
C) a provision against vertical integration by the manufacturer.
D) a provision against horizontal integration by the manufacturer.

Question 23

Which of these illustrates channel conflict?

A) A manufacturer granting retailers a cooperative advertising allowance
B) A manufacturer training a retailer's salespeople in proper sales techniques
C) A retailer making late payments to a vendor
D) A retailer adhering to a manufacturer's suggested list price

Question 24

Which of these illustrates channel cooperation?

A) A manufacturer granting a wholesaler credit for all sales in its territory, whether or not initiated by the wholesaler
B) A manufacturer requiring its franchised retailer dealers to pay a national advertising allowance
C) A retailer selling a dealer brand to limit price competition
D) A retailer raising the price of the manufacturer brands it sells to make its dealer brands better buys

Question 25

In a pushing strategy,

A) the manufacturer or service provider hopes that consumers will request the promoted good.
B) the promotional support is completely paid for by the manufacturer or service provider.
C) a firm first generates consumer demand, and then secures dealer support.
D) the various firms in a distribution channel cooperate in marketing a product.

Question 26

With which distribution approach would a company first seek to generate final consumer demand and then secure dealer support?

A) Horizontal integration
B) Vertical integration
C) Pulling strategy
D) Pushing strategy

Question 27

In comparison to the distribution channel for final goods, the distribution channel for industrial goods

A) is more prone to use team selling.
B) is less direct.
C) is longer.
D) offers less technical service.

Question 28

A keiretsu is a(n)

A) Japanese form of quality control.
B) Japanese form of inventory management.
C) form of information processing used by distributors.
D) integrated network of suppliers, manufacturers, and resellers.

Question 29

The broad range of activities concerned with efficiently delivering raw materials, parts, semifinished items, and finished products to designated places, at designated times, and in proper condition constitutes

A) channel functions.
B) the sorting process.
C) distribution planning.
D) logistics.

Question 30

When a firm seeks to ship out 95 percent of its orders within five hours of receipt, it is involved with

A) an order cycle.
B) just-in-time inventory management.
C) inventory turnover.
D) a distribution standard.

Question 31

The transportation method with the lowest shipping cost may not be selected due to its high inventory-carrying costs. This illustrates

A) economic order quantity calculations.
B) distribution standards.
C) the total-cost approach.
D) customer service.

Question 32

The U.S. transportation form with the largest share of ton miles shipped is

A) railroads.
B) waterways.
C) motor carriers.
D) airways.

Question 33

Which statement concerning railroads is correct?

A) Railroads offer more flexibility in shipping than motor carriers.
B) Fixed costs of railroad shipping are low.
C) Railroads often ship items that are too heavy for motor carriers.
D) Railroads generally ship items that are high in value relative to their size.

Question 34

Which statement concerning motor carriers is NOT correct?

A) The trucking industry has not yet been deregulated.
B) Motor carriers ship small packages over short distances.
C) Motor carriers serve more locations than railroads, pipelines, or airways.
D) Motor carriers are often used in conjunction with rail and air transportation services.

Question 35

Which statement concerning waterways is NOT correct?

A) Few new technological developments have affected waterway transportation.
B) Waterways are used primarily for coal, iron ore, gravel, grain, and cement.
C) The use of waterways is heavily seasonal.
D) Waterways have the lowest shipping cost per ton mile of any major form of transportation.

Question 36

High-value, perishable, and emergency goods dominate which transportation form?

A) Waterways
B) Pipelines
C) Motor carriers
D) Airways

Question 37

Which statement concerning airways is NOT correct?

A) The use of airways generally requires the use of regional warehouses.
B) Airways are the fastest transportation form.
C) The use of airways as a transportation form is dominated by high-value, perishable, and emergency goods.
D) The costs of packing, unpacking, and preparing goods are lower for airways than for other transportation forms.

Question 38

Transportation service companies

A) consolidate small shipments from several companies.
B) specialize in next-day delivery.
C) handle shipments of small and moderate-sized packages.
D) specialize in intermodal shipping.

Question 39

Which of these is NOT a transportation service company?

A) U.S. Postal Service
B) Specialized express companies
C) Private parcel services
D) Freight forwarders

Question 40

Which specialized transportation form receives profits on the basis of the difference between carload (cl) and less than carload (lcl) rates?

A) Freight forwarders
B) Private parcel services
C) Specialized express companies
D) Container shipping services

Question 41

Which carrier is excused from legal restrictions and must only comply with safety rules?

A) Exempt
B) Contract
C) Private
D) Common

Question 42

The major objective of inventory management is to

A) minimize stockouts.
B) provide a continuous flow of goods.
C) reduce physical distribution costs.
D) minimize inventory investment.

Question 43

In a just-in-time (JIT) inventory system,

A) firms rely on usage rate formulas in ordering decisions.
B) ordering costs are minimized.
C) the economic order quantity (EOQ) is used in ordering.
D) firms order frequently and in lower quantities.

Question 44

Channel members are able to exchange data via computer hookups through

A) stock turnover.
B) just-in-time (JIT) inventory planning.
C) electronic data interchange (EDI).
D) a quick response (QR) inventory system.

Question 45

The number of times during a stated period (usually one year) that the average inventory on hand is sold is known as

A) stock turnover.
B) the just-in-time inventory ratio.
C) the reorder point ratio.
D) the economic order quantity.

Question 46

The period from the date of an order until the date items are ready to sell or use is the

A) economic order quantity.
B) reorder point. .
C) order lead time.
D) just-in-time ratio

Question 47

The order volume corresponding to the lowest sum of order-processing and inventory-holding costs is known as the

A) economic order quantity.
B) reorder point.
C) total-cost quantity.
D) electronic data interchange level.

Question 48

What type of warehouse is most appropriate for a firm with stable inventory levels throughout the year?

A) Public
B) Private
C) Bonded
D) Field

Question 49

Which type of warehouse allows a firm to delay the payment of taxes until goods are sold?

A) Public
B) Private
C) Field
D) Bonded

Question 50

Which type of warehouse allows a firm to use inventory as collateral for a loan?

A) Public
B) Private
C) Bonded
D) Field

Question 51

Outsourcing is an activity most closely related to

A) relationship marketing.
B) customer service.
C) a direct channel of distribution.
D) a value delivery chain.

Question 52

The process of service recovery (correcting service quality problems) is most closely related to

A) the total delivered product.
B) the total-cost concept.
C) a direct channel of distribution.
D) a value delivery chain.

Question 53

Which concept in distribution is based upon the concept of long-term relationships, and partnerships between customers and their suppliers?

A) Relationship marketing
B) Customer service
C) Direct channels of distribution
D) Vertical integration

Question 54

Manufacturers often like to produce a limited variety due to specialization. However, final consumers usually desire a wide choice and the ability to purchase complementary goods. These differences are resolved through

A) vertical integration.
B) horizontal integration.
C) the sorting process.
D) channel cooperation.

Question 55

What role does assorting perform in the sorting process?

A) It consolidates small shipments from several manufacturers to reduce freight costs.
B) It enables consumers to have a wide choice of products and complementary goods by shopping at one retailer.
C) It distributes items to a wide range of geographic markets.
D) It separates merchandise into grades, colors, and sizes.

Question 56

Vertical integration (such as a manufacturer's undertaking retail responsibilities through ownership) is an example of a(n)

A) contractual channel arrangement.
B) administered channel arrangement.
C) direct channel of distribution.
D) indirect channel of distribution.

Question 57

A major advantage of a direct channel is

A) better efficiency in selling to small accounts.
B) lower investment requirements.
C) control over a firm's entire marketing efforts.
D) fewer customer transactions.

Question 58

A franchise agreement between a Wendy's franchisee and the Wendy's franchisor illustrates

A) an administered arrangement.
B) selective distribution.
C) a dual channel of distribution.
D) horizontal integration.

Question 59

The highest degree of channel control is possible with ___ distribution.

A) intensive
B) dual
C) selective
D) exclusive

Question 60

Convenience products should utilize ___ distribution.

A) intensive
B) dual
C) exclusive
D) selective

Question 61

The Following Questions are linked to this scenario: A leading manufacturer of automobile tires is reevaluating its channel strategy.

-The tire manufacturer wishes to minimize retail price competition among retailers. It should utilize ___ distribution.

A) dual channels of
B) intensive
C) selective
D) exclusive

Question 62

The Following Questions are linked to this scenario: A leading manufacturer of automobile tires is reevaluating its channel strategy.

-The tire manufacturer is interested in differentiated marketing in which it appeals to both price-conscious shoppers through mass merchandisers and to service-oriented shoppers through gasoline stations and tire specialty stores. The firm should utilize which type of distribution?

A) Intensive
B) Dual channels
C) Selective
D) Direct

Question 63

The Following Questions are linked to this scenario: A leading manufacturer of automobile tires is reevaluating its channel strategy.

-The tire manufacturer sells tires to new car makers (original equipment manufacturers), as well as to service stations (for the replacement or aftercare market). What form of distribution should the firm use?

A) Intensive
B) Selective
C) Exclusive
D) Dual channels

Question 64

Which is the largest discount that a distribution intermediary typically receives?

A) Cash
B) Seasonal
C) Quantity
D) Functional

Question 65

The battle of the brands illustrates

A) a pushing strategy.
B) a pulling strategy.
C) channel cooperation.
D) channel conflict.

Question 66

The balance of power has shifted from manufacturers to wholesalers due to

A) the decline in importance of franchising.
B) higher brand loyalty in purchasing by final consumers.
C) the popularity of private brands.
D) vertical integration by manufacturers.

Question 67

A slotting allowance, in which retailers require that a manufacturer pay for the use of shelf space for new products, illustrates

A) channel cooperation.
B) channel conflict.
C) a pulling strategy.
D) the total-cost approach.

Question 68

Which of these is NOT a means by which retailers can develop channel power?

A) Centralizing purchasing
B) Developing large chains
C) Developing popular dealer brands
D) Providing high levels of customer service

Question 69

A manufacturer's refusal to ship merchandise to a retailer that undercuts competitors' prices is an example of

A) channel cooperation.
B) channel conflict.
C) a pushing strategy.
D) a pulling strategy.

Question 70

For a manufacturer, the training of a wholesaler's sales personnel, providing of promotional materials, and offering a special sales contest for the wholesaler's sales personnel are important elements in which type of distribution strategy?

A) Pushing
B) Pulling
C) Administered channel
D) Dual channel

Question 71

Cooperative advertising, in which a manufacturer pays a portion of a wholesaler's or retailer's advertising costs, is an example of which strategy?

A) An administered channel
B) Channel conflict
C) Pulling strategy
D) Pushing strategy

Question 72

A manufacturer decides to use final consumer-oriented, rather than trade-oriented promotions. The manufacturer is employing which type of distribution strategy?

A) Dual channel
B) Administered channel
C) Pushing
D) Pulling

Question 73

Which concept is central to a pulling strategy?

A) Channel conflict among channel members
B) Derived demand
C) Vertical integration by retailers
D) Distribution efficiency through the elimination of some channel members

Question 74

A major difference between industrial and consumer product channels of distribution is that an industrial channel is less likely to use

A) specification selling.
B) direct channels of distribution.
C) retailers.
D) leasing, rather than selling.

Question 75

Which concept is closest to an order cycle?

A) Economic order quantity
B) Stock turnover
C) Order lead time
D) Safety stock

Question 76

Which of these is an example of a clear distribution standard?

A) Distribution costs need to be lowered.
B) Order status information should be available more quickly due to the increased use of computer notebooks by the sales force.
C) The use of emergency next-day shipments should be reduced.
D) Goods damaged in transit should be reduced by half.

Question 77

A medical equipment manufacturer has decided to use airways due to its being the least costly means of physical distribution. The firm is aware that airways have the highest transportation costs. Which concept does this strategy illustrate?

A) The total-cost approach
B) A physical distribution system
C) Clear distribution standards
D) Vertical integration

Question 78

Medical supplies, flowers, and high-value computer supplies are most likely to utilize which transformation form?

A) Motor trucks
B) Railroads
C) Waterways
D) Airways

Question 79

Which method of coordinating transportation facilitates the use of intermodal shipping?

A) Freight forwarding
B) Electronic data interchange
C) Quick response planning
D) Containerization

Question 80

Relationship marketing is typically required for the success of

A) economic order quantity management.
B) intermodal shipping.
C) just-in-time (JIT) inventory systems.
D) containerization.