Question 1

Managers and consultants at Greenscapes Corp. are meeting to discuss better ways to package its products to reduce damage and make loading more efficient. The primary function they are trying to improve is:

Accepted Answer

Materials handling involves the movement, protection, storage, and control of materials and products throughout manufacturing, warehousing, distribution, consumption, and disposal. Improving packaging to reduce damage and make loading more efficient directly relates to materials handling.

Question 2

Air-Tech management learns that last month's production run of heaters at its Newark plant is defective and announces a recall of the specific models produced. To handle the large number of products it expects to receive for replacement of the defective thermostats, Air-Tech will probably need to add a to its distribution network.

Accepted Answer

The answer of Air-Tech management learns that last month's production...

Question 3

The order-processing task that involves verifying product availability, checking prices and customer credit ratings, and filling orders is:

Accepted Answer

The order-processing task that involves verifying product availability, checking prices and customer credit ratings, and filling orders is known as order handling. Warehousing involves storing goods, materials handling involves physically moving products, information processing involves computer processing of data, and order entry only refers to the initial recording of a customer's order.

Question 4

Greg is a physical distribution manager. He is currently developing and maintaining assortments of products that are adequate for customer demand. In which of the following stages of the physical distribution system is Greg currently involved?

Accepted Answer

Greg is involved in inventory management, which involves developing and maintaining assortments of products to meet customer demand.

Question 5

ClearChem is a producer of chemicals used in car detailing and painting. Because of the volatility of their chemical products when exposed to dirt and heat, ClearChem operates its own facilities for storing and shipping its products. ClearChem's facilities are most likely known as:

Accepted Answer

Private warehouses are owned and operated by the company that owns the products being stored, which allows for greater control over the storage and handling conditions. Given the volatility of ClearChem's chemical products, it makes sense for the company to operate its own facilities for storing and shipping its products rather than relying on a public warehouse or distribution center. Therefore, private warehouses are the best choice for ClearChem's facilities.

Question 6

Nathan is trying to decide which shipping company to use to transport his custom-made furniture to customers. Nathan is facing a decision about:

Accepted Answer

Nathan is deciding how to transport the furniture to his customers, which falls under the category of order delivery. Therefore, E is the correct answer.

Question 7

Walgreen's drug stores prefer to receive refills of prescriptions through a phone­based system where customers can directly key in the information about the drug. By receiving orders in this manner rather than through a paper- based system or by a phone conversation with a pharmacy employee, Walgreen's has been able to save time and money on:

Accepted Answer

Walgreen's has been able to save time and money on order entry by using a phone-based system for prescription refills, where customers can directly key in the information about the drug.

Question 8

involves developing and maintaining adequate assortments of products to meet customers' needs.

Accepted Answer

Inventory management involves developing and maintaining adequate assortments of products to meet customers' needs by ensuring the right products are available at the right time.

Question 9

Eric is concerned about not having enough air conditioning units in inventory during June, July, and August so he keeps extra inventory to guard against stockouts during this critical period. Eric is keeping:

Accepted Answer

Eric is keeping safety stock, which is extra inventory that is held to guard against stockouts during critical periods.

Question 10

Anya, a sales manager for Pacific Lumber, tells Ricardo, the firm's inventory manager, that the firm's failure to have adequate supplies of pressure-treated lumber on hand has cost the firm $175,000 in lost sales. Which of the following inventory management costs does this figure represent?

Accepted Answer

The $175,000 in lost sales represents a stockout cost, which occurs when inventory is insufficient to meet demand, leading to lost sales and customer dissatisfaction.

Question 11

Johnson Controls hires a consultant to assess its materials handling procedures. The consultant recommends the implementation of if they want easier movement of items between internal destinations in the warehouse.

Accepted Answer

The answer of Johnson Controls hires a consultant to assess...

Question 12

A commonly used computerized means of integrating order processing with production, inventory, accounting, and transportation is:

Accepted Answer

Electronic Data Interchange (EDI) is a computerized system that allows the integration of order processing with production, inventory, accounting, and transportation by enabling the exchange of business documents in a standardized electronic format between organizations.

Question 13

A manufacturer has decided to improve its inventory management by maintaining low inventory levels and waiting to purchase materials until right before they are needed in production. This inventory management technique is called:

Accepted Answer

Just-in-time (JIT) is an inventory management technique where materials are purchased and received just in time for production, reducing inventory levels and minimizing holding costs.

Question 14

Fansteel manufactures parts used in jet engines, which it sells to companies such as Boeing. When shipping products to Boeing, Fansteel seals the parts in 8' × 8' × 40' boxes for shipping to decrease loss and damage. This method of materials handling is:

Accepted Answer

Fansteel is using containerization, which involves using large standardized containers to transport goods. The use of these containers helps to reduce the risk of loss or damage during shipping, as well as increasing efficiency in the supply chain.

Question 15

What is the primary determinant in deciding how materials will be handled?

Accepted Answer

The primary determinant in deciding how materials will be handled is the product characteristics. This is because the handling method chosen should be appropriate for the specific product, taking into consideration factors such as weight, size, fragility, and hazardous properties. Therefore, E is the best choice. The other options (unit loading, containerization, customer preference, and cost reduction) may also play a role in determining how materials are handled, but they are not the primary determinant.

Question 16

Which of the following physical distribution functions involves design and operation of facilities for storing goods?

Accepted Answer

Warehousing involves the design and operation of facilities for storing goods.

Question 17

Order handling involves all of the following activities except that the:

Accepted Answer

Order handling involves activities such as verifying product availability, transmitting the order to the warehouse, instructing the warehouse to fill the order, and getting approval from the credit department. However, the customer placing a purchase order is not an activity in order handling as it is the initial step that triggers the need for order handling.

Question 18

The result of an inventory stockout usually results in a(n) .

Accepted Answer

A stockout typically leads to lost sales because customers cannot purchase the out-of-stock items, potentially leading them to buy from competitors.

Question 19

What function of physical distribution enables companies to compensate for dissimilar production and consumption rates and stabilize prices and availability of seasonal items?

Accepted Answer

Warehousing allows companies to store products until they are needed, which helps to balance out the differences in production and consumption rates. This function is crucial for managing seasonal items, ensuring that they are available when demand is high and helping to stabilize their prices by allowing for storage during off-peak times.

Question 20

Morgan Steel Company leases a warehouse in Jacksonville, Alabama to serve Deep South markets that were large enough and stable enough to make a long-term commitment to fixed facilities. This is an example of a:

Accepted Answer

A private warehouse is owned or leased by a company for its own use, typically to serve specific markets or regions, as in the case of Morgan Steel Company leasing a warehouse for its Deep South markets.

Quiz 13: Marketing Channels and Supply-Chain Management