Deck 14: Supply Chain and Distribution Strategies

Question 1

To a producer of goods, a greater number of channel levels means ________ and greater channel complexity.

A) less distance between producer and end consumer
B) less control over the distribution process
C) fewer potential channel conflicts
D) higher taxes
E) fewer channel partners

Answer 1

B

Question 2

When determining the distribution intensity, three strategies are available to marketers: intensive, exclusive, and ________ distribution.

A) multichannel
B) selective
C) international
D) direct
E) extensive

Answer 2

B

Question 3

Offering credit to buyers and gathering information are both examples of ________ functions provided by channel intermediaries.

A) communication
B) marketing
C) exchange
D) facilitating
E) physical

Answer 3

D

Question 4

Sometimes a producer of luxury products chooses only one or a few dealers in a territory to distribute its products in order to maintain a sense of prestige for the products. Generally these dealers are given a right to ________ distribution.

A) exclusive
B) selective
C) intensive
D) administered
E) corporate

Question 5

Which of the following is NOT a typical marketing channel intermediary?

A) wholesaler
B) retailer
C) facilitator
D) government agency
E) agent

Question 6

Which of the following should be the first step in designing a channel strategy?

A) identifying channel objectives
B) understanding the desires of the target customer
C) analyzing channel alternatives
D) evaluating intermediaries
E) exploring international opportunities

Question 7

Breaking bulk and creating assortments are both examples of ________ functions provided by channel intermediaries.

A) communication
B) marketing
C) exchange
D) facilitating
E) physical

Question 8

________ are intermediaries that facilitate the exchange of products but do not take title to anything they sell.

A) Wholesalers
B) Retailers
C) Independent intermediaries
D) Merchants
E) Agents

Question 9

When marketers determine the distribution intensity for a product, they are determining the ________ of a channel level.

A) width
B) length
C) logistics
D) assortment
E) mode

Question 10

Which of the following is the term for resellers, brokers, and facilitators that improve the effectiveness of a marketing channel?

A) third-party logistics providers
B) channel leaders
C) channel intermediaries
D) logistics managers
E) consignees

Question 11

An intermediary who ________ has purchased the goods being handled.

A) breaks bulk
B) takes title
C) creates assortments
D) takes consignments
E) selectively distributes

Question 12

Which type of distribution is used when the producer wants more than one, but fewer than all, of the intermediaries who are willing to carry its products?

A) exclusive
B) selective
C) intensive
D) administered
E) corporate

Question 13

A selective distribution strategy is most suitable for which consumer product category?

A) convenience products
B) unsought goods
C) shopping products
D) luxury products
E) materials and supplies

Question 14

Producers benefit from using intermediaries because they ________.

A) offer greater efficiency in making goods available to target markets
B) bring a fresh point of view to strategy development
C) eliminate risk
D) are generally backlogged with orders
E) refuse to store products for longer than a few days

Question 15

Which of the following is in place when a manufacturer makes use of more than one type of channel?

A) multichannel distribution system
B) intermediation
C) third-party logistics
D) supply chain management
E) vertical marketing system

Question 16

Which of the following is defined as the process of delivering products and services to customers?

A) logistics
B) channel management
C) distribution
D) supply chain management
E) transportation management

Question 17

An intensive distribution strategy is most suitable for which consumer product category?

A) convenience products
B) unsought goods
C) shopping products
D) luxury products
E) materials and supplies

Question 18

In a(n) ________ channel, the same member both produces and distributes a product or service.

A) tiered
B) direct
C) horizontal
D) vertical
E) exclusive

Question 19

Which of the following is an example of a complete business-to-business channel?

A) producer to retailer to consumer
B) producer to wholesaler to retailer to consumer
C) producer to agent
D) producer to facilitator
E) producer to dealer to customer

Question 20

At minimum, a channel of distribution consists of a producer and a(n) ________.

A) wholesaler
B) agent
C) broker
D) intermediary
E) customer

Question 21

In a ________ channel organization, two or more companies at one level join together to form an alliance.

A) franchise
B) horizontal
C) VMS
D) multichannel
E) conventional

Question 22

________ is the coordination of all activities related to the transportation or delivery of products and services that occur within the boundaries of a single business or organization.

A) Third-party logistics
B) Logistics
C) Channel management
D) Supply chain management
E) Transportation management

Question 23

Marketing logistics involves getting the right product to the right customer in the right place at the right time at the right price. Which of the following is NOT included in this process?

A) planning the physical flow of goods and services
B) implementing the plan for the flow of goods and services
C) controlling the physical flow of goods, services, and information
D) gathering customer's ideas for new products
E) A and C

Question 24

Which of the following is NOT an area of responsibility for a logistics manager?

A) information
B) storage location
C) marketing
D) inventory
E) production

Question 25

Multichannel conflict refers to conflicts between ________.

A) multiple channel types
B) channel members at different levels
C) independent channel members at the same level
D) consumer and business channels
E) outbound and inbound channels

Question 26

________ is the coordination of all internal and external activities that affect a company's distribution process.

A) Third-party logistics
B) Logistics
C) Channel management
D) Supply chain management
E) Transportation management

Question 27

________ conflict occurs between different levels of the same channel, while ________ conflict occurs among firms at the same level of the channel.

A) Horizontal; vertical
B) Vertical; horizontal
C) Contractual; corporate
D) Corporate; franchise
E) Wholesaler; retailer

Question 28

Which of the following is another name for the channel leader?

A) materials expert
B) logistics manager
C) consigner
D) channel captain
E) logistics leader

Question 29

Of the three parties involved in the distribution process, ________ are responsible for receiving the distributed goods.

A) shippers
B) brokers
C) agents
D) carriers
E) consignees

Question 30

________ logistics controls the movement of products from points of production to consumers.

A) Inbound
B) Reverse
C) Outbound
D) Vertical
E) Horizontal

Question 31

A producer that minimizes possession time would be most likely to expect which of the following benefits?

A) better information flows among channel members
B) more easily accessible storage locations
C) greater production capability
D) reduced horizontal conflict
E) reduced vertical conflict

Question 32

A conventional channel consists of one or more ________ producers, wholesalers, and retailers.

A) product-related
B) independent
C) contract
D) estranged
E) merchant

Question 33

________ broadens the logistics concept to include all organizations, both inside and outside of a firm, that affect the distribution process.

A) Reverse logistics
B) Supply chain management
C) A vertical marketing system (VMS)
D) Just-in-time management
E) Physical distribution

Question 34

Instead of handling its logistics systems internally, a firm could hire a(n) ________ company to manage all or part of its distribution network.

A) just-in-time
B) RFID
C) SKU
D) TMS
E) 3PL

Question 35

An advantage of a vertical marketing system (VMS) in comparison to a conventional channel organization is that it acts as a(n) ________ system.

A) unified
B) more creative
C) profit-driven
D) customer-driven
E) independent

Question 36

Physical distribution focuses on ________ logistics.

A) inbound
B) horizontal
C) vertical
D) outbound
E) reverse

Question 37

Marketing logistics involves which of the following flows of products and information?

A) outbound and inbound only
B) outbound, inbound, and reverse
C) inbound and reverse only
D) outbound and reverse only
E) outbound only

Question 38

________ refers to the storage of goods awaiting transport or shipping.

A) Produce
B) Inventory
C) Distribution
D) Bulk
E) Supply

Question 39

To reduce inventory management costs, many companies use a system called ________, which involves having goods delivered exactly when they are needed.

A) reduction-inventory management
B) just-in-time inventory management
C) limited inventory logistics
D) supply chain management
E) economic order quantity

Question 40

________ logistics concerns the methods consumers use to send products to a producer for return or repair.

A) Inbound
B) Reverse
C) Outbound
D) Vertical
E) Horizontal

Question 41

Steve's Physco Skates sells its products to Walmart, which then sells them to the consumer. This is an example of a(n) ________.

A) direct marketing channel
B) zero-level channel
C) indirect marketing channel
D) horizontal channel
E) vertical marketing system

Question 42

When two Taco Bell restaurants have a disagreement over who should be able to sell in quantity at a discount to the local high school band, they are in a ________ conflict.

A) vertical
B) multichannel
C) no-win
D) horizontal
E) functional

Question 43

Of the three parties involved in the distribution process, ________ are responsible for physically transporting the goods.

A) shippers
B) brokers
C) agents
D) carriers
E) consignees

Question 44

Which of the following is an example of horizontal channel conflict?

A) managers of two separate Holiday Inns disagreeing over what constitutes poor service
B) United Airlines competing with Northwest Airlines for customers
C) disgruntled factory workers complaining about a small pay raise
D) the BMW dealership in Fort Wayne complaining that the BMW dealership in Indianapolis is situated too close
E) A and D

Question 45

Chewing gum is stocked in many outlets in the same market or community; in fact, it is placed in as many outlets as possible. This is an example of ________ distribution.

A) exclusive
B) selective
C) multichannel
D) intensive
E) vertical

Question 46

A ________ is a physical facility used primarily for the storage of goods held in anticipation of sale or transfer within the marketing channel.

A) stock-keeping unit
B) wholesaler
C) retail outlet
D) warehouse
E) showroom

Question 47

Which of the following is an example of a multichannel distribution system?

A) Walmart locating to several countries
B) JC Penney's catalog and retail store sales
C) Avon's door-to-door distribution
D) Starbuck's location inside of book stores
E) a hotel providing guest privileges at a health spa across the street

Question 48

A warehouse serves the function of ________ when it provides a variety of products in one location.

A) creating assortments
B) just in time processing
C) third-party logistics
D) order processing
E) inventory control

Question 49

Jewels for the Rich and Famous sells very exclusive jewelry with a minimum price of $25,000 to customers around the world. Speed of delivery to distant markets is a must. Management should consider using ________ as its main carrier.

A) rail
B) air
C) trucks
D) pipelines
E) water

Question 50

Another name for a large warehouse is a ________.

A) third-party logistics company
B) cross-dock
C) transportation management system
D) distribution center
E) stock-keeping unit

Question 51

Warehouses reduce large product shipments into smaller ones more suitable for individual retailers. This process is called ________.

A) creating assortments
B) breaking bulk
C) third-party logistics
D) order processing
E) inventory control

Question 52

The most widely used form of transport is ________.

A) water
B) air
C) truck
D) pipeline
E) rail

Question 53

Of the three parties involved in the distribution process, ________ own the goods that are being distributed.

A) shippers
B) brokers
C) agents
D) carriers
E) consignees

Question 54

Which of the following is the best example of a direct channel?

A) J&L Manufacturing Company sells drapery hardware to The Home Depot's Design Center, and the Design Center then sells it to consumers.
B) Family Dollar Store sells modeling clay to school-age children.
C) A wholesaler sells candy to convenience stores that then sell it to store patrons.
D) Farmer Mintz sells corn to the Hughes household, who will eat it for supper.
E) A farmer in Colombia sells flowers to an international broker, who makes sure the flowers reach consumers in the United States.

Question 55

Staples Office Supply opened an online store that created competition with many of its dealers. The corporate office created a ________ conflict.

A) multichannel
B) conventional
C) logistics
D) horizontal
E) intermediation

Question 56

Which of the following transportation modes has the highest cost?

A) water
B) truck
C) air
D) pipeline
E) rail

Question 57

Which product will most likely be exclusively distributed?

A) BMW cars
B) Levi's blue jeans
C) Bazooka bubble gum
D) Prairie Farms yogurt
E) Coca-Cola

Question 58

Through the use of ________ tags, a company can use a computer that receives information from an electronic chip to locate exactly where a product is from production to shipment.

A) RFID
B) UPC
C) VMS
D) IT
E) 3PL

Question 59

Grayville Rock and Gravel, located in a seaport town, sells rock, gravel, and sand to local markets. It has just been awarded a contract with a company 500 miles down the coast. Management should consider switching from truck to ________ transport.

A) water
B) rail
C) pipeline
D) air
E) reverse

Question 60

SKU numbers and bar codes are both used to ________.

A) identify retail price
B) identify materials and components
C) monitor inventory
D) break bulk
E) identify end retailers

Question 61

Unlike facilitators, agents do not take title to products.

Question 62

Refer to the scenario below to answer the following questions.
Miller Meat Company contracts with several Midwestern farmers to raise beef and pork for its meat processing center. To guarantee freshness, Miller Meat Company relies on a vast distribution network. For delivery to local grocers in Indiana, Miller Meat uses its own fleet of refrigerated trucks; delivery to these Indiana grocers constitutes 65 percent of Miller Meat's business. For deliveries in Illinois, Wisconsin, and points directly west of the Mississippi River, Miller Meat Company contracts with a refrigerated fleet that specializes in expediting smaller shipments. For faster delivery during peak times, Miller Meat Company often uses its own trucks to deliver to the expedited fleet's consolidation point from its distribution warehouse in Indiana. During the holiday season, however, several specialty distributors contract with Miller Meat Company to package specialty meats in gift boxes, then ship them directly to the recipients. For these specialty shipments within Indiana, Illinois, and Wisconsin, Miller uses its normal delivery mode. For all other specialty shipments, Miller ships from its distribution warehouse via air, then contracts with expedited carriers in various cities to deliver to the recipients.
Management at a chain of Indiana grocery stores with a long history of purchasing products from Miller Meat is unhappy with the timing of deliveries. In fact, the grocery store's management is considering switching to another meat supplier who will delivery more frequently. This is an example of a(n) ________ conflict.

A) independent channel
B) vertical
C) horizontal
D) intermodal
E) conventional

Question 63

Refer to the scenario below to answer the following questions.
Miller Meat Company contracts with several Midwestern farmers to raise beef and pork for its meat processing center. To guarantee freshness, Miller Meat Company relies on a vast distribution network. For delivery to local grocers in Indiana, Miller Meat uses its own fleet of refrigerated trucks; delivery to these Indiana grocers constitutes 65 percent of Miller Meat's business. For deliveries in Illinois, Wisconsin, and points directly west of the Mississippi River, Miller Meat Company contracts with a refrigerated fleet that specializes in expediting smaller shipments. For faster delivery during peak times, Miller Meat Company often uses its own trucks to deliver to the expedited fleet's consolidation point from its distribution warehouse in Indiana. During the holiday season, however, several specialty distributors contract with Miller Meat Company to package specialty meats in gift boxes, then ship them directly to the recipients. For these specialty shipments within Indiana, Illinois, and Wisconsin, Miller uses its normal delivery mode. For all other specialty shipments, Miller ships from its distribution warehouse via air, then contracts with expedited carriers in various cities to deliver to the recipients.
In using air transportation and then expedited truck carriers to deliver specialty items to customers outside of a designated delivery range, Miller Meats is using ________.

A) all of its supply chain
B) a direct channel
C) indirect marketing
D) intermodal distribution
E) a vertical marketing system

Question 64

A major role played by intermediaries is to buy large quantities of products from many producers and break them down into the smaller quantities and broader assortments wanted by consumers.

Question 65

When customers prefer a wide assortment of products, it makes sense to select a longer channel structure.

Question 66

Intensive distribution seeks many outlets in a market, while selective distribution seeks only one outlet in a given market area.

Question 67

A Universal Product Code (UPC) is a retail bar code that can be used to monitor inventory.

Question 68

A marketing channel can also be referred to as a channel of distribution.

Question 69

Logistics involves the coordination of all organizations that affect a producer's distribution process, while supply chain management involves only the coordination of inbound flow of products and services to a producer.

Question 70

Refer to the scenario below to answer the following questions.
Miller Meat Company contracts with several Midwestern farmers to raise beef and pork for its meat processing center. To guarantee freshness, Miller Meat Company relies on a vast distribution network. For delivery to local grocers in Indiana, Miller Meat uses its own fleet of refrigerated trucks; delivery to these Indiana grocers constitutes 65 percent of Miller Meat's business. For deliveries in Illinois, Wisconsin, and points directly west of the Mississippi River, Miller Meat Company contracts with a refrigerated fleet that specializes in expediting smaller shipments. For faster delivery during peak times, Miller Meat Company often uses its own trucks to deliver to the expedited fleet's consolidation point from its distribution warehouse in Indiana. During the holiday season, however, several specialty distributors contract with Miller Meat Company to package specialty meats in gift boxes, then ship them directly to the recipients. For these specialty shipments within Indiana, Illinois, and Wisconsin, Miller uses its normal delivery mode. For all other specialty shipments, Miller ships from its distribution warehouse via air, then contracts with expedited carriers in various cities to deliver to the recipients.
Which of the following would be involved in Miller Meat Company's inbound logistics management?

A) local grocers in Indiana who sell the company's products
B) Midwestern farmers who raise beef and pork for the meat processing center
C) the refrigerated fleet that expedites small shipments
D) air carriers that take Miller's specialty shipments
E) recipients of Miller's gift boxes

Question 71

A transportation management system can be used to automate the shipping process and to make recommendations on carrier selection.

Question 72

Liquids such as oil and natural gas can be transported through pipelines.

Question 73

In general, approximately 30% to 50% of the final selling price of a product can be attributed to distribution costs.

Question 74

Nita can visit her local supermarket and buy a dozen roses, a gallon of milk, two birthday cards, a bag of cat litter, and a pan for roasting a turkey. This illustrates how channels of distribution benefit consumers by ________.

A) creating atmospherics
B) creating assortments
C) directing logistics
D) managing knowledge
E) managing relationships

Question 75

Despite storage and maintenance costs, most companies find it profitable to hold inventory for long periods of time.

Question 76

Freight distribution is also known as intermodal distribution.

Question 77

Burt can visit his local hardware store and buy one 4-inch paint brush and not the case of 24 brushes that the retailer had to buy. This is an example of how the channel of distribution facilitates ________.

A) assortment creation
B) risk taking
C) breaking bulk
D) relationship management
E) logistics

Question 78

Goods that are cross-docked are warehoused, but the warehouse does not take title to the goods.

Question 79

Conventional and horizontal channels do not have channel leaders.

Question 80

A channel captain can motivate channel members through financial incentives.