Chapter 16: Managing Retailing, Wholesaling, and Logistics

GENERAL CONCEPT M$ltiple Choice

1. Supply chain management (SCM) starts before physical distribution. It involves procuring the right inputs, _____ them efficiently into finished products, and then distributing them to the right customers. a. using b. converting c. delivering d. labeling e. procuring ns!er" b #age" $%1 &ifficulty" Medium CS'" nalytic S(ills ). ________ involves planning the infrastructure to meet demand, then implementing and controlling the physical flo!s of materials and final goods from points of origin to points of use, to meet customer re*uirements at a profit. a. Mar(et logistics b. Supply chain management c. SCM d. Integrated logistics systems e. +one of the above ns!er" a #age" $%1 &ifficulty" Medium ,. Integrated logistics systems (I-S) involves materials management, ________, and physical distribution, aided by information technology. a. information flo! systems b. material flo! systems c. cash flo! systems d. product management systems e. none of the above ns!er" b #age" $%) &ifficulty" Medium CS'" nalytic S(ills $. Ma.imum customer service implies larger inventories, premium transportation, and multiple !arehouses, all of !hich raise mar(et/logistics costs. Mar(et/logistics costs interact !ith mar(eting strategy and are often ________ related. a. disproportionately b. positively c. negatively d. complementarily e. none of the above ns!er" c #age" $%) &ifficulty" 0ard CS'" 1eflective 2hin(ing

!E"T#ON"

1%$

Copyright 3 )445 #earson 6ducation, Inc. #ublishing as #rentice 0all

#art %" &elivering 7alue

8. 9hen considering competitors: service standards, companies normally !ant to match or e.ceed the competitors: service level !hile simultaneously ma.imi;ing ________. a. profit b. revenue c. sales d. costs e. all of the above ns!er" a #age" $%, &ifficulty" Medium CS'" nalytic S(ills %. <our ma=or decisions must be made !ith regard to mar(et logistics" order processing, !arehousing, inventory, and ________. a. transportation b. purchases c. pricing d. information e. none of the above ns!er" a #age" $%$ &ifficulty" 6asy

1%8

Copyright 3 )445 #earson 6ducation, Inc. #ublishing as #rentice 0all

Chapter 1%" Managing 1etailing, 9holesaling, and -ogistics

>. 2he elapsed time bet!een 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 cycle e. order/to/payment cycle ns!er" e #age" $%$ &ifficulty" 6asy CS'" nalytic S(ills ?. ________ cost increases at an accelerating rate as the customer/service level approaches 144@. a. &elivery b. #romotion c. Inventory d. Merchandising e. Storage ns!er" c #age" $%$ &ifficulty" 6asy CS'" nalytic S(ills 5. t some stoc( level point, management must reorder product to refill the inventory to an acceptable level. 2his point is called the ________. a. order (reorder) point b. inventory c. minimum inventory level d. inventory carrying costs e. none of the above ns!er" a #age" $%$ &ifficulty" Medium

14. ________ !arehouses store goods for moderate to long periods of time. a. &istribution b. utomated c. Storage d. Company/o!ned e. -ocal ns!er" c #age" $%$ &ifficulty" 6asy 11. Inventory/carrying costs represent substantial dollars for manufacturers. 2hese inventory/carrying costs include storage charges, cost of capital, ta.es and insurance, and depreciation and obsolescence. Carrying costs might run as high as ________ of the value of the inventory. a. >4@ b. $4@ c. )8@ d. ,4@ e. 84@ ns!er" d #age" $%$ &ifficulty" 0ard CS'" nalytic S(ills

Copyright 3 )445 #earson 6ducation, Inc. #ublishing as #rentice 0all

1%%

#art %" &elivering 7alue

1). 'eyond the optimal order *uantity, 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 rises d. order/processing cost per unit falls more rapidly e. order/processing cost per unit falls more slo!ly ns!er" e #age" $%8 &ifficulty" 0ard 1,. Companies are reducing their inventory costs by treating inventory items differently, positioning them according to ris( and opportunity. 0igh/ris(, lo!/opportunity items are (no!n as ________. a. nuisance items b. bottlenec( items c. commodities d. critical items e. containeri;ed items ns!er" b #age" $%8 &ifficulty" 0ard CS'" nalytic S(ills

Tr$e%&alse
1$. Supply chain management starts !hen the product comes off the factory floor and enters the distributionAtransportation channels. ns!er" <alse #age" $%1 &ifficulty" Medium CS'" nalytic S(ills 18. Mar(et logistics involves planning the infrastructure to meet demand, then implementing and controlling the physical flo!s of materials and final goods from points of origin to points of use, to meet customer re*uirements at a profit. ns!er" 2rue #age" $%1 &ifficulty" Medium 1%. Integrated logistics systems involves materials management, material flo! systems, and electronic distribution. ns!er" <alse #age" $%) &ifficulty" Medium CS'" nalytic S(ills 1>. 2oday information systems play a critical role in managing mar(et logistics, especially computers, satellite trac(ing, and electronic funds transfers. ns!er" 2rue #age" $%) &ifficulty" 6asy CS'" Bse of I2 1?. Choosing a mar(et/logistics system calls for e.amining the total cost (M) associated !ith different proposed systems and selecting the system that minimi;es it, !here 2 (total freight costs) C <9 (total fi.ed !arehouse cost) C 79 (total variable !arehouse costs) is e.pressed as M D 2 C <9 C 79. ns!er" 2rue #age" $%, &ifficulty" 0ard CS'" nalytic S(ills 15. Ene of the four ma=or decisions that must be made about mar(et logistics is" 0o! much inventory do !e (eep in the !arehouseF ns!er" 2rue #age" $%$ &ifficulty" 0ard CS'" 1eflective 2hin(ing

1%>

Copyright 3 )445 #earson 6ducation, Inc. #ublishing as #rentice 0all

Chapter 1%" Managing 1etailing, 9holesaling, and -ogistics

)4. 2he order-to-payment cycle is the elapsed time bet!een an order:s receipt, delivery, and payment by the customer. ns!er" 2rue #age" $%$ &ifficulty" 6asy CS'" nalytic S(ills )1. Erder/processing costs must be compared !ith inventory-carrying costs because as the amount of stoc( carried increases, the higher the inventory/carrying costs. ns!er" 2rue #age" $%$ &ifficulty" Medium CS'" 1eflective 2hin(ing )). Inventory costs increases at a decreasing rate as customer/service levels approach 144@ fulfillment. ns!er" <alse #age" $%$ &ifficulty" Medium CS'" nalytic S(ills ),. 2he choice of transportation methods of distribution have negligible effects on the prices charged for the product and therefore mar(eters need not be overly involved in this process. ns!er" <alse #age" $%8 &ifficulty" Medium CS'" 1eflective 2hin(ing

Copyright 3 )445 #earson 6ducation, Inc. #ublishing as #rentice 0all

1%?