Question 1

Which statement concerning organizational consumers is NOT correct?

Accepted Answer

Organizational consumers purchase goods and services for purposes related to their operations, production, or resale, not for personal use. Personal use is characteristic of individual or final consumers.

Question 2

Which is NOT an organizational consumer?

Accepted Answer

A final consumer is an individual who purchases goods or services for personal use, not for organizational purposes.

Question 3

Firms dealing with organizational consumers are engaged in

Accepted Answer

Firms dealing with organizational consumers, such as businesses and institutions, are engaged in industrial marketing, which involves selling products or services to other businesses rather than individual consumers.

Question 4

A firm shifting work that was formerly done in-house to another firm is an example of

Accepted Answer

Outsourcing refers to the practice of a company contracting another company to perform services or create goods that were previously done in-house. This can be done for various reasons, including cost reduction, accessing specialized skills, or focusing on core business activities.

Question 5

The major differences between organizational and final consumers are due to the

Accepted Answer

Organizational consumers typically make purchases for business purposes, often in larger quantities and with more complex decision-making processes, while final consumers buy for personal use. The nature of the market and purchases differ significantly between these two groups.

Question 6

When organizational consumers employ multiple-buying responsibility, they

Accepted Answer

Multiple-buying responsibility involves the use of two or more employees in the decision-making process, especially for complex or expensive purchases, to ensure diverse perspectives and expertise are considered.

Question 7

The costs and benefits of alternative materials, components, designs, or processes are evaluated by organizational consumers in

Accepted Answer

Value analysis is the process where organizational consumers evaluate the costs and benefits of different materials, components, designs, or processes to find the best value. This involves looking at not just the cost but also the functionality and efficiency of alternatives to make informed decisions.

Question 8

What technique are organizational consumers using when they seek answers to such questions as: "Can substitute goods or services perform a function more efficiently?" and "Would a more costly component lower annual operating costs?"

Accepted Answer

Value analysis is a technique used by organizational consumers to evaluate a product or service with the aim of reducing its cost while maintaining or improving its quality. It involves asking questions about the efficiency and cost-effectiveness of goods or services, including the potential for substitutes and the impact of more costly components on operating costs.

Question 9

Organizational consumers evaluate suppliers in terms of merchandise quality, customer service, and reliability in which process?

Accepted Answer

Vendor analysis is the process where organizational consumers evaluate their suppliers based on various criteria such as merchandise quality, customer service, and reliability. This helps organizations ensure they are working with the best possible suppliers for their needs.

Question 10

Which of these questions is posed by vendor analysis?

Accepted Answer

Vendor analysis involves evaluating suppliers based on their ability to meet delivery schedules, quality standards, and cost requirements. Option D directly relates to assessing a vendor's delivery capability.

Question 11

Which statement concerning leasing is NOT correct?

Accepted Answer

Final consumers do engage in leasing, particularly for items such as cars and electronics, making the statement that final consumers are not involved with leasing incorrect.

Question 12

An organizational buyer selects a seller on the basis of terms and conditions of purchase outlined by competing sellers. The buyer is using which process?

Accepted Answer

Competitive bidding is a process where buyers invite potential sellers to submit bids outlining their terms and conditions for the purchase. The buyer then selects the seller based on these submissions, often considering the best value or lowest cost among the competing offers.

Question 13

Competitive bidding is used primarily to

Accepted Answer

Competitive bidding is primarily used to ensure fairness in purchasing by allowing multiple suppliers to submit bids, thereby promoting transparency and equal opportunity.

Question 14

In competitive bidding situations, prices are set through

Accepted Answer

In competitive bidding situations, prices are typically set through sellers independently submitting price quotations, allowing the buyer to choose among them based on price and other factors.

Question 15

Which concept states that changes in wholesale sales can be directly traced to final consumer demand?

Accepted Answer

Derived demand is the concept that explains how the demand for one product or service is linked to the demand for another. In this context, changes in wholesale sales are directly related to the final consumer demand, as wholesalers purchase more goods to meet the anticipated demand from end consumers.

Question 16

Which concept suggests that small changes in final consumer demand can generate large fluctuations in organizational consumers' demand?

Accepted Answer

The accelerator principle suggests that small changes in consumer demand can lead to significant variations in demand for businesses further up the supply chain, as these businesses adjust their inventory and investment levels in anticipation of future consumer demand.

Question 17

Which statement about the accelerator principle is NOT correct?

Accepted Answer

The accelerator principle suggests that a change in final consumer demand leads to a larger proportional change in the demand for capital goods or organizational consumer demand, not the other way around as stated in option C.

Question 18

Single-source accountability is a major advantage with

Accepted Answer

Systems selling, where a company offers a comprehensive package or system, allows for single-source accountability because the customer deals with only one vendor for all components of the system, simplifying management and responsibility.

Question 19

When organizational consumers select suppliers who agree to purchase goods and services, as well as sell them, they are involved with

Accepted Answer

Reciprocity in business refers to an arrangement where companies agree to buy from each other, creating a mutual relationship where both parties are both suppliers and customers to one another.

Question 20

Which organizational consumer buying practice is the most likely to restrain trade?

Accepted Answer

Reciprocity can restrain trade because it involves companies buying from each other, potentially limiting competition and excluding other vendors who might offer better prices or quality.

Quiz 9: Organizational Consumers