Question 1

Air express companies place many small packages into specially designed cylinders that conform to the interior dimensions of a cargo airplane.This practice protects the smaller packages and helps to reduce distribution costs.The air express companies are practicing

Accepted Answer

A) containerization. 
B) drop-boxing. 
C) freight forwarding. 
D) micro packaging. 
E) specific partitioning.

Question 2

The complete set of firms,facilities,and logistics activities that are involved in procuring materials,transforming them into intermediate or finished products,and distributing them to customers is called the

Accepted Answer

A) supply chain. 
B) physical distribution group. 
C) logistics partnership. 
D) just-in-time team. 
E) strategic logistics partnership.

Question 3

The total cost approach to physical distribution focuses exclusively on the total cost of transporting a product.

Accepted Answer

A) True 
 B)False

Question 4

A manufacturer that transports products to retail outlets directly instead of using a distribution center is most likely to encounter which of the following?

Accepted Answer

A) equivalent delivery speed at lower cost 
B) faster delivery speed at higher cost 
C) slower delivery speed at equivalent cost 
D) faster delivery speed at equivalent cost 
E) slower delivery speed at lower cost

Question 5

The challenges of coordinating logistics functions in a supply chain have led to less sharing of information over the Internet and on websites.

Accepted Answer

A) True 
 B)False

Question 6

For many physical goods,firms spend half or more of their total marketing dollars on physical distribution activities.

Accepted Answer

A) True 
 B)False

Question 7

When a firm skips the distribution center concept and ships products directly from the manufacturing site to retail stores,the products may move more quickly but at a higher cost.

Accepted Answer

A) True 
 B)False

Question 8

Just-in-time delivery reduces storing and handling costs for business customers.

Accepted Answer

A) True 
 B)False

Question 9

The total cost approach ignores inventory carrying costs and excludes the use of cost accounting and economics tools.

Accepted Answer

A) True 
 B)False

Question 10

With the PD concept,firms decide what specific service level to provide their customers.

Accepted Answer

A) True 
 B)False

Question 11

About what percentage of GDP do the developed economies of the U.S.and Europe spend on logistics-related costs?

Accepted Answer

A) 1 to 2 percent 
B) 5 to 7 percent 
C) 9 to 15 percent 
D) 20 to 25 percent 
E) 30 to 35 percent

Question 12

Which of the following is true of distribution centers?

Accepted Answer

A) They are designed to facilitate the flow of products through the channel. 
B) They are the same as public warehouses. 
C) They are not places where regrouping activities such as bulk-breaking are performed. 
D) They increase storing costs. 
E) They are designed to eliminate all storage.

Question 13

Use this information for questions that refer to the United Tools case. Terry Harter is marketing manager for United Tools,and Mike O'Reilly is the firm's logistics manager.They work together to make decisions about how to get United's hand and power tools to its customers-a mix of manufacturing plants and final consumers (who buy United tools at a hardware store).United Tools does not own its own transport facilities,and it works with wholesalers to reach its business customers.
Together,Harter and O'Reilly try to coordinate transporting,storing,and product-handling activities to minimize cost while still achieving the customer service level their customers and intermediaries want.This usually requires that United keep an inventory of most of its products on hand; but demand for its products is fairly consistent over time,so inventory is easy to manage.
Harter has identified four options for physical distribution systems she could use to reach two of her key wholesalers,Ralston Supply and Ricotta Tool Co.The total cost for each option-and the distribution service levels that can be achieved-are as follows:
$\begin{array}{c}
\begin{array}{lll}
\
1.\
2.\
3.\
4.\
\
\end{array}
\begin{array}{lll}
\text{Main feature of system:}\
Airfreight\
Inland ~waterways\
Trucks\
Rail ~and ~regional\
warehouses\
\end{array}
\begin{array}{lll}
\begin{array}{rc}
\text { Total Cost}&\text {  Distribution Service Level }\
\$ 1,000,000 & 95 \text { percent } \
\$ 300,000 & 60 \text { percent } \
\$ 500,000 & 70 \text { percent } \
\$ 650,000 & 80 \text { percent }\
\
\end{array}
\end{array}
\end{array}$
 Ralston Supply expects a very high level (90 percent)of distribution customer service.Ricotta Tool Co.is willing to settle for a 70 percent customer service -leveleven if that means some products will occasionally be out of -stockif it gets products at a lower price.
For its large retail hardware customers (like Home Depot),United regularly ships smaller orders directly to individual stores or in some cases to the retail chain's warehouses.Cross-country shipments usually go by rail,while regional shipments usually go by truck.
One of United's biggest customers has placed a very large,heavy order.Its warehouse is in a location served by all transport modes,and the customer has directed United to ship the order by the mode with the lowest transport costs.In this situation,United will probably ship the tools by

Accepted Answer

A) airfreight. 
B) truck. 
C) waterways. 
D) railroad.

Question 14

Which of the following statements about inventory and storage is true?

Accepted Answer

A) A distribution center is used to avoid unnecessary storing costs. 
B) Only government agencies can store products in public warehouses. 
C) Decisions about inventory levels are usually not of concern to marketing managers,since inventory levels are best determined based on the amount of the product produced. 
D) Achieving customer service goals makes a large inventory almost inevitable. 
E) Minimizing storage costs will lead to lower total distribution costs.

Question 15

To what does the physical distribution customer service level refer?

Accepted Answer

A) It refers to the costs to carry a product in inventory. 
B) It refers to the length of time a product is stored in inventory. 
C) It refers to the effort put in by channel members to meeting customer needs. 
D) It refers to the location of distribution centers. 
E) It refers to the ability of a firm to deliver rapidly and dependably what customers want.

Question 16

A JIT system shifts greater responsibility for physical distribution activities forward in the channel.

Accepted Answer

A) True 
 B)False

Question 17

When a firm depends primarily on airplanes for its goods transportation,which of the following would be a related likely feature?

Accepted Answer

A) high total cost of distribution 
B) high cost of packing and unpacking goods 
C) low inventory costs 
D) moderate cost of preparing goods for sale 
E) low dependability in meeting schedules

Question 18

Which of the following statements concerning physical distribution trade-offs is FALSE?

Accepted Answer

A) The trade-offs that must be made in the physical distribution area can be complicated. 
B) The lowest-cost approach may not be the best,as customer service levels vary from one market to the other. 
C) Many firms are trying to address trade-off complications with e-commerce. 
D) Most physical distribution decisions involve trade-offs among costs,customer service level,and sales. 
E) An efficient physical distribution system does not have to make trade-offs for customers.

Question 19

Which of the following is a feature of public warehouses as storing facilities?

Accepted Answer

A) low unit charges 
B) high managerial control 
C) very high fixed investments 
D) less flexibility 
E) high adequacy for the product line

Question 20

Transporting is the marketing function that makes products available when and where they need to be and involves a cost.

Accepted Answer

A) True 
 B)False

Exam 11: Distribution Customer Service and Logistics

Air express companies place many small packages into specially designed cylinders that conform to the interior dimensions of a cargo airplane.This practice protects the smaller packages and helps to reduce distribution costs.The air express companies are practicing

The complete set of firms,facilities,and logistics activities that are involved in procuring materials,transforming them into intermediate or finished products,and distributing them to customers is called the

The total cost approach to physical distribution focuses exclusively on the total cost of transporting a product.

A manufacturer that transports products to retail outlets directly instead of using a distribution center is most likely to encounter which of the following?

The challenges of coordinating logistics functions in a supply chain have led to less sharing of information over the Internet and on websites.

For many physical goods,firms spend half or more of their total marketing dollars on physical distribution activities.

When a firm skips the distribution center concept and ships products directly from the manufacturing site to retail stores,the products may move more quickly but at a higher cost.

Just-in-time delivery reduces storing and handling costs for business customers.

The total cost approach ignores inventory carrying costs and excludes the use of cost accounting and economics tools.

With the PD concept,firms decide what specific service level to provide their customers.

About what percentage of GDP do the developed economies of the U.S.and Europe spend on logistics-related costs?

Which of the following is true of distribution centers?

Which of the following statements about inventory and storage is true?

To what does the physical distribution customer service level refer?

A JIT system shifts greater responsibility for physical distribution activities forward in the channel.

When a firm depends primarily on airplanes for its goods transportation,which of the following would be a related likely feature?

Which of the following statements concerning physical distribution trade-offs is FALSE?

Which of the following is a feature of public warehouses as storing facilities?

Transporting is the marketing function that makes products available when and where they need to be and involves a cost.