Question 1

The notion of physical distribution is

Accepted Answer

Physical distribution refers to the movement of products from producers to end users, including activities such as inventory management, transportation, and order processing. It is relevant to both manufacturers and retailers.

Question 2

At the annual managers' planning conference, Andrea Conrad asks the other managers to consider her proposal to increase the quantity of inventory to a five-week supply in order to increase the percentage of completely filled customer orders from 85% to 90%. She states that she is willing to trade off the ____ incurred for the positive effect of better customer service.

Accepted Answer

Increasing the quantity of inventory to a five-week supply will require higher warehousing costs. However, this trade-off is acceptable for better customer service by increasing the percentage of completely filled customer orders from 85% to 90%. Lower response time, higher transportation costs, higher order processing costs, and higher performance levels are not related to the proposal.

Question 3

In an administered vertical marketing system (VMS), interorganizational relationships are

Accepted Answer

The answer of In an administered vertical marketing system (VMS),...

Question 4

The best way to reduce overall distribution costs is to

Accepted Answer

Using a total-cost approach to analyze and evaluate the entire system allows for a comprehensive understanding of all the costs associated with distribution. This can help identify areas where costs can be reduced or eliminated, leading to overall lower distribution costs. Minimizing costs associated with materials handling and transportation and reducing unnecessary distribution functions can also help reduce overall costs, but these strategies should be informed by a total-cost analysis. Finding the cheapest price for each function and lowering service standards may lead to short-term cost savings, but can harm the overall effectiveness and reputation of the distribution system in the long-term.

Question 5

The main objective of physical distribution should be to

Accepted Answer

The main objective of physical distribution is to decrease costs while increasing service, ensuring that products are delivered efficiently to customers.

Question 6

The United States Postal Service works hard to get priority mail from the sender to the recipient as quickly as possible in order to compete with companies such as UPS and FedEx. The postal service is competing with UPS and FedEx in terms of

Accepted Answer

The answer of The United States Postal Service works hard...

Question 7

Order processing, inventory management, materials handling, warehousing, and transportation are the activities that define

Accepted Answer

The activities listed (order processing, inventory management, materials handling, warehousing, and transportation) are all part of physical distribution, which is the process of getting products from the manufacturer or producer to the end customer. Physical distribution is an important part of supply chain management and involves coordinating and managing the flow of goods from point of origin to point of consumption. The other options are not as relevant as they focus on specific aspects of the distribution process.

Question 8

To expand the number of its retail outlets in the Washington, D.C. area, Whole Foods bought out a small chain of organic food stores in northern Virginia. This type of integration is called

Accepted Answer

Whole Foods' acquisition of a small chain of organic food stores in northern Virginia involves the integration of two companies that operate in the same industry and serve the same customer base. This type of integration is called horizontal integration.

Question 9

Select the greatest advantage of horizontal channel integration.

Accepted Answer

Horizontal channel integration involves bringing together firms at the same level of the distribution channel, such as manufacturers, to work together in various aspects like marketing research, advertising and purchasing, leading to economies of scale and significant cost savings. This results in the channel becoming more efficient in terms of information sharing, promotion, and sales support.

Question 10

What are the three primary tasks of order processing?

Accepted Answer

The three primary tasks of order processing are order handling (receiving and reviewing the order), order entry (entering the order into the system), and order delivery (fulfilling and shipping the order). Option D includes all three of these tasks. Option A is incorrect because it includes "order follow-up" which is not a primary task of order processing. Option B is incorrect because "inventory management" is not a primary task of order processing. Option C is incorrect because "materials handling" and "warehousing" are not primary tasks of order processing. Option E is incorrect because "order checking" is not a primary task of order processing; it is a subtask of order handling or order entry.

Question 11

In the distribution channel for Pizza Hut, channel members are linked by legal agreements that spell out the obligations and rights of each member. This is an example of a(n) ____ vertical marketing system.

Accepted Answer

In a contractual vertical marketing system, the members are linked through contractual agreements that define their roles and responsibilities. This aligns with the scenario described where the members of the Pizza Hut distribution channel have legal agreements that outline their obligations and rights.

Question 12

Order processing is defined as

Accepted Answer

Order processing involves receiving and transmitting sales order information, which is the definition given in choice A. The other options are either too specific (choice B), not comprehensive enough (choice C), or not accurate (choices D and E).

Question 13

According to the text, physical distribution cost tradeoffs enable firms to

Accepted Answer

Physical distribution cost tradeoffs involve analyzing and determining the most cost-effective ways to distribute products, in terms of transportation, storage, and inventory management. By identifying and utilizing resources in a way that minimizes costs, firms can increase their efficiency and profitability in the distribution process.

Question 14

A goal of physical distribution is to reduce ____ or how long it takes to complete a process.

Accepted Answer

Cycle time is the amount of time it takes to complete a process from start to finish. Reducing cycle time is a key goal of physical distribution as it leads to faster and more efficient processes, which can result in cost savings and increased customer satisfaction.

Question 15

Physical distribution activities may be performed by a producer, wholesaler, retailer or

Accepted Answer

Physical distribution activities may be outsourced to logistics or transportation companies, making it possible for any of the above-mentioned entities to outsource these activities.

Question 16

In an administered VMS, informal coordination brings about a high level of interorganizational management. Nonetheless,

Accepted Answer

In an administered VMS, informal coordination between the channel members brings about a high level of interorganizational management, while each individual firm still retains its autonomy in decision-making. Therefore, the correct choice is D, which states that the channel members remain autonomous. Choices A, B, and E are incorrect since they imply a lack of congruence or coordination in decision-making or loss of autonomy among channel members.

Question 17

If a firm decides to contract its physical distribution functions to third parties that have no managerial authority within the marketing channel, it is using

Accepted Answer

The term used for contracting physical distribution functions to third parties is outsourcing. The other options, such as sole-sourcing, logistics, wholesaling, and distribution services, do not accurately describe this scenario.

Question 18

As her Internet quilt and bed linen business grew, Hollie could no longer perform all the distribution activities, so she hired a shipper and an information technology firm to assist with these functions. Hollie is using ____ for physical distribution for her business.

Accepted Answer

Hollie is outsourcing the physical distribution activities of her business by hiring a shipper and an information technology firm to assist with these functions. Outsourcing refers to the practice of contracting out a business function to an external provider, and in this case, it is being used for physical distribution. Therefore, option E is the best choice. The other options (A) producers, (B) wholesalers, (C) retailers, and (D) selling agents are not relevant in this context, as they do not relate to outsourcing physical distribution activities.

Question 19

When Zappos, Inc., an online marketer of shoes, accessories, and clothing, contracts out the physical distribution task to third parties such as UPS, this arrangement is called ____. This is due to the fact that UPS does not have managerial authority within the Zappos marketing channel.

Accepted Answer

The arrangement where Zappos contracts out the physical distribution task to third parties such as UPS is called outsourcing. This is because UPS does not have managerial authority within the Zappos marketing channel, and is only responsible for the physical delivery of goods.

Question 20

An important goal of physical distribution is reducing the time it takes to complete

Accepted Answer

The answer of An important goal of physical distribution is...

Quiz 13: Marketing Channels and Supply-Chain Management