Question 1

Supply chain management is a subset of logistics and is only concerned with the movement of products from point A to point B.

Accepted Answer

Supply chain management is a broader concept than logistics and encompasses the coordination and management of all activities involved in the sourcing, procurement, production, and delivery of products or services from the supplier to the end customer. Logistics is a part of supply chain management that focuses on the movement and storage of goods.

Question 2

Which of the following statements is true of distributors in a channel of distribution?

Accepted Answer

Distributors add value in a number of different ways such as providing warehousing, transportation, sales and marketing support, and customer service. Therefore, statement C is true. Statements A, B, and D are all incorrect as distributors increase the efficiency of transactions, charge for adding value, and simplify distribution channels by connecting producers to consumers.

Question 3

Which of the following statements is true of the members of a distribution channel?

Accepted Answer

The businesses that buy from wholesalers can be retailers, other wholesalers, or business users. The number of channel intermediaries can vary depending on the channel structure, so A is not necessarily true. B is also not true because a producer can follow multiple channels of distribution. D is incorrect because retailers sell products directly to final consumers, not to businesses or other nonfinal users.

Question 4

Hansel owns and runs a fruit juice manufacturing company. He decides that the company will sell packaged fruit juices through wholesalers and retailers. In this scenario, which of the following distribution strategies is Hansel planning to use?

Accepted Answer

Hansel's plan to sell packaged fruit juices through wholesalers and retailers indicates that he is intending to use channel intermediaries, as the juices will be distributed through intermediaries who will then make them available to consumers. Direct channel would involve selling the juices directly to consumers, which is not the strategy Hansel has decided on. Voicemail marketing and direct mail are unrelated strategies that do not apply to Hansel's plan.

Question 5

Single Tone, a local music and video store, consistently offers music CDs and movie DVDs at lower prices than its competitors. The pricing tactic that Single Tone uses is high/low pricing.

Accepted Answer

High/low pricing involves alternating between high prices and promotional discounts, whereas consistently offering lower prices is more characteristic of an everyday low pricing strategy.

Question 6

One drawback of using distributors in a distribution channel is that the addition of intermediaries increases the total number of transactions that must occur to get the goods from the producer to the consumer.

Accepted Answer

Using distributors typically reduces the total number of transactions because they consolidate orders and handle distribution logistics, streamlining the process between producers and consumers.

Question 7

Plateus Inc., a warehouse club, is considered a channel intermediary because it purchases chocolates from Chocodelight chocolatiers and sells it to customers.

Accepted Answer

Plateus Inc. is a warehouse club that purchases chocolates from Chocodelight chocolatiers and sells it to customers, making it a channel intermediary.

Question 8

Breakeven analysis is a relatively simple process that determines the number of units a firm must sell to cover all costs.

Accepted Answer

Breakeven analysis determines the number of units a firm must sell to cover all costs, making it a relatively simple process.

Question 9

Newton Coal Supply takes possession of coal from the local mining companies. However, it does not store a single ounce of coal on its premises. Instead, it simply arranges for the coal to be shipped directly from the mining company to its customers. This type of arrangement suggests that Newton Coal Supply is a _____.

Accepted Answer

A drop shipper arranges for products to be shipped directly from the supplier to the customer without ever handling or storing the product themselves. This is exactly what Newton Coal Supply does with coal. The other options - full-service merchant, cash and carry wholesaler, and truck jobber - all involve some form of physical handling or storage of the products.

Question 10

Merchant wholesalers can develop their own marketing strategies, including pricing strategies, because they:

Accepted Answer

Merchant wholesalers take legal title to the goods they distribute, which means they own and control the products until they are sold to retailers or other customers. As owners of the goods, they have the flexibility to set their own pricing strategies and marketing plans to maximize profits.

Question 11

Which of the following statements is true of independent wholesalers?

Accepted Answer

Independent wholesalers refer to those who are not affiliated with any specific manufacturer or producer. According to industry estimates, about 80% of all wholesalers fall into the category of merchant wholesalers (who take legal ownership of goods and sell to other businesses or retailers) and are thus independent wholesalers. Therefore, statement A is correct. Statement B is incorrect because merchant wholesalers do take legal ownership of the goods they distribute. Statement C is incorrect because agents do not take legal possession of goods but act on behalf of manufacturers or producers to secure sales. Statement D is incorrect because independent wholesalers often represent multiple producers to offer a variety of products to their customers.

Question 12

Drop shippers do not take legal title of the goods they help distribute; instead, they merely provide delivery services for other wholesalers.

Accepted Answer

The answer of Drop shippers do not take legal title...

Question 13

First Bake delivers fresh cakes, breads, pies, and muffins to several small grocery stores in Central Radisova.In addition to delivering baked goods, First Bake's employees help the small store owners keep track of what they need to order, and they even remove outdated baked goods from the shelves. First Bake is an example of a:

Accepted Answer

First Bake is a truck jobber because they deliver products directly to stores and provide additional services like inventory management and removing outdated goods.

Question 14

Which of the following statements best defines a channel of distribution?

Accepted Answer

A channel of distribution refers to the path that a product takes from the producer to the consumer. This includes all the intermediary entities such as wholesalers, distributors, and retailers that the product goes through before reaching the end consumer. This path can also include different distribution channels like online stores, physical storefronts, or direct sales.

Question 15

Which of the following are the elements of the distribution strategy?

Accepted Answer

The elements of the distribution strategy are channels of distribution and physical distribution. Recruitment and performance appraisals are elements of the human resource strategy, pricing strategy and credit standards are elements of the pricing strategy, and normal distribution and probability distribution are statistical concepts unrelated to the distribution strategy.

Question 16

Infomercials and telemarketing are examples of direct response retailing.

Accepted Answer

Infomercials and telemarketing are forms of direct response retailing, where the customer can immediately respond to the advertisement and make a purchase or request more information.

Question 17

In the context of nonstore retailers, vending machines are a key element of multilevel marketing.

Accepted Answer

Vending machines are not typically associated with multilevel marketing, as they are a form of automated retail rather than a network marketing structure.

Question 18

Everyday-low pricing (EDLP)aims to achieve long-term profitability through high sales volume.

Accepted Answer

This statement is true. EDLP is a pricing strategy where a retailer consistently sets low prices for their products to attract a large volume of customers and achieve long-term profitability through increased sales. By keeping prices low, they hope to maintain customer loyalty and repeat business, which can lead to a stable revenue stream over time.

Question 19

Which of the following statements is true of the distribution strategy?

Accepted Answer

The distribution strategy is a plan for delivering the right product to the right person at the right place at the right time. It considers factors such as physical distribution and channel intermediaries, but the ultimate goal is to ensure the timely and efficient delivery of the product to customers. The distribution strategy may also address conflicts between pricing and promotion strategies, but this is not the primary focus. Eliminating channel intermediaries is one possible approach to distribution, but it is not the only or even the most common strategy.

Question 20

Truck jobbers are limited-service merchant wholesalers whose responsibilities include checking the stock, suggesting reorder quantities, and removing out-of-date goods.

Accepted Answer

This statement accurately describes the responsibilities of truck jobbers.

Quiz 13: Distribution and Pricing: Right Product, Right Person, Right Place, Right Price