Deck 11: Distribution Customer Service and Logistics

Question 1

The physical distribution concept focuses on lower costs and better service to increase customer value.

Answer 1

True
Explanation: The physical distribution concept seeks to minimize the cost of distribution for a given customer service level.Lower costs and better service help increase customer value.

Question 2

PD service levels may be affected by the time taken to enter and process orders,but not by backorder procedures.

Answer 2

False
Explanation: Refer to Exhibit 11-3.The time to enter and process orders and backorder procedures affects PD service levels.

Question 3

For many physical goods,firms spend half or more of their total marketing dollars on physical distribution activities.

Answer 3

True
Explanation: For some products,a company may spend half or more of its total marketing dollars on physical distribution activities.

Question 4

Most physical distribution decisions involve trade-offs among costs,the customer service level,and sales.

Question 5

Retailers selling a new product that is in hot demand,like the latest movie release or a best-selling book,would be unlikely to incur higher costs for faster delivery (physical distribution).

Question 6

With the PD concept,firms decide what specific service level to provide their customers.

Question 7

Whenever Product includes a physical good,Place requires logistics decisions.

Question 8

Physical distribution is the part of marketing that is visible to most customers.

Question 9

The physical distribution concept is based on the idea that selecting the lowest-cost transporting alternative and the lowest-cost storing alternative will result in the lowest total distribution cost.

Question 10

A firm may spend 50 percent or more of its total marketing dollars on PD activities.

Question 11

Information technology involves a trade-off because it cannot improve service levels and cut costs at the same time.

Question 12

The PD concept seeks to maximize the profit for a given customer service level.

Question 13

Advance information on product availability affects physical distribution (PD)service levels.

Question 14

A marketing manager should never increase the total cost of distribution,even if this would result in a better customer service level for his or her target market.

Question 15

The total cost approach involves evaluating each possible PD system and identifying only the transportation costs associated with each alternative.

Question 16

Logistics costs do not vary between developed economies like the U.S.and developing economies like those of Africa.

Question 17

Better information flows make it easier to coordinate activities,improve efficiency,and add value for the customer.

Question 18

The physical distribution concept seeks to minimize the cost of distribution for a given customer service level.

Question 19

In countries where physical distribution systems are inefficient,consumers face shortages of the products they need.

Question 20

Logistics focuses on the handling of goods along a channel of distribution but not within individual firms.

Question 21

Every firm should try to use the just-in-time approach to physical distribution.

Question 22

The supply chain concept rests on the idea that distribution can usually be reduced if the firm that is the "weakest link" in the channel of distribution is eliminated.

Question 23

Just-in-time delivery reduces storing and handling costs for business customers.

Question 24

Most marketing functions can be shared in a channel,but the storing function is almost always handled by the producer.

Question 25

The total cost approach to physical distribution focuses exclusively on the total cost of transporting a product.

Question 26

A firm that uses of electronic data interchange (EDI)can easily share the information put in a standardized format between its different computers.

Question 27

A channel of distribution is part of a supply chain.

Question 28

The term supply chain can be misleading because the chain typically involves only two firms: a vendor (selling firm)and a customer (buying firm).

Question 29

A channel of distribution is part of a broader network of relationships called a supply chain.

Question 30

The challenges of coordinating logistics functions in a supply chain have led to less sharing of information over the Internet and on websites.

Question 31

In both a supply chain and a channel of distribution,the primary aim should be to create maximum value for the customer.

Question 32

Electronic data interchange is important in business markets in the United States,but it plays little role in international trade.

Question 33

A JIT system shifts greater responsibility for physical distribution activities forward in the channel.

Question 34

Just-in-time delivery systems typically shift more responsibility for PD activities to the customer rather than the supplier.

Question 35

A channel of distribution for a product involves more firms than a supply chain for the same product.

Question 36

A supply chain is the same thing as a channel of distribution.

Question 37

A supply chain includes all the activities involved in procuring materials,transforming them into products,and distributing them to customers.

Question 38

The total cost approach ignores inventory carrying costs and excludes the use of cost accounting and economics tools.

Question 39

In both supply chains and channels of distribution,the primary aim should be for each firm to keep its own costs as low as possible.

Question 40

The total cost approach to physical distribution management involves evaluating all the costs of alternative physical distribution systems,including transporting,storing,and handling costs.

Question 41

Transporting costs usually add relatively little to the cost of valuable products.

Question 42

The sensors placed on trucks and train cars to monitor their movement can help managers in identifying opportunities to more effectively manage the economic and environmental costs of transportation.

Question 43

The best transporting mode is the one that provides the required level of service at the lowest cost.

Question 44

Compared to other transportation alternatives,transportation by pipeline tends to have high costs and low dependability in meeting schedules.

Question 45

For short distances and higher-value products,trucks may charge higher rates but provide slower service.

Question 46

Airfreight generally increases both transporting cost and the total cost of distribution because it tends to add to inventory costs,spoilage,theft,and damage.

Question 47

When a firm uses airplanes for transportation of goods,it will incur high costs in packing,unpacking,and preparing goods for sale.

Question 48

In the United States,trucks carry more freight over more miles than any other mode of transportation.

Question 49

Goods that might become separated or damaged during transport can benefit from containerization in shipping.

Question 50

Low transporting cost is not the only criterion for selecting the best mode of transportation.

Question 51

In the United States,there is little competition among transporting firms for shipping business because government regulations control most transporting rates,routes,and schedules.

Question 52

Railroads are considered inefficient in transporting perishable items or those in urgent demand.

Question 53

At least 75 percent of all U.S.freight moves,at least part of the way,by trucks.

Question 54

Transporting is the marketing function that makes products available when and where they need to be and involves a cost.

Question 55

Although ships and barges are slow,they are the lowest-cost method of freight transporting and are useful when speed is not critical.

Question 56

Compared to other modes of transportation,water transportation is medium in its dependability in meeting schedules and high in its ability to handle many varieties of goods.

Question 57

Containerization is the method of grouping individual items into an economical shipping quantity and sealing them in protective containers for transit to the final destination.

Question 58

Transport costs represent a significant part of the cost of products that are already valuable relative to their size and weight.

Question 59

Transporting choices in developing countries are usually fewer in number.

Question 60

Transport costs per pound for less-than-full carloads are less than for full loads.

Question 61

When a firm skips the distribution center concept and ships products directly from the manufacturing site to retail stores,the products may move more quickly but at a higher cost.

Question 62

Storing allows producers and intermediaries to keep stocks at convenient locations,ready to meet customers' needs.

Question 63

It is more expensive to produce large quantities of one size,and store the unsold quantity,than to have shorter production runs.

Question 64

Storing is the marketing function that increases the value of goods without involving any costs.

Question 65

Logistics,or physical distribution,is related to the ________ part of the marketing mix.

A)Possession
B)Place
C)Production
D)Promotion
E)Product

Question 66

Which of the following is true of logistics in marketing strategy?

A)It differs from physical distribution in its combinations of decisions.
B)Even when the combinations of logistics decisions vary,they result in the same level of distribution service.
C)It includes the transporting,storing,and handling of physical goods within individual firms.
D)It specifically expands spatial separations between producers and consumers.
E)A macro-marketing perspective suggests logistics costs are the same between any two countries.

Question 67

When both regrouping and storing are needed,a firm should add a distribution center.

Question 68

Public warehouses (compared to private warehouses)provide greater economy and flexibility when a firm does not have a regular need to store a large volume of goods,but they provide fewer services than a firm's own warehouse could.

Question 69

The main function of a distribution center is to speed the flow of goods and avoid unnecessary storage.

Question 70

As a percentage of GDP,which of the following most likely characterizes logistic costs incurred in developing economies in Africa?

A)less than 9 percent
B)9 to 12 percent
C)approximately 12 percent
D)approximately 15 percent
E)30 percent or more

Question 71

Private warehouses (compared to public warehouses)are most appropriate when a firm has a regular need to store a large quantity of goods.

Question 72

Inventory is the amount of goods being stored.

Question 73

A distribution center is a special kind of warehouse designed to perform regrouping activities.

Question 74

Logistics,or physical distribution,is the ________ part of the marketing mix.

A)Possession
B)Placement
C)Production
D)Promotion
E)Product

Question 75

In which of the following places would the logistics costs be most likely to run between 9 and 15 percent of GDP?

A)China
B)Singapore
C)Europe
D)Latin America
E)Africa

Question 76

Which of the following is true of logistics costs?

A)They are important to both firms and consumers.
B)They don't vary from firm to firm.
C)They are very similar across different countries.
D)They represent less than one-fourth the expense attached to hospital supplies.
E)They have little impact on a macro-marketing system.

Question 77

Efforts to reduce the environmental effects of transporting usually increase the firm's distribution costs.

Question 78

Bar codes,UPC numbers,and RFID tags make it easy for computers to monitor inventory,order stock,and track shipping costs.

Question 79

A distribution center is a special kind of public warehouse designed specifically for storing perishable products.

Question 80

Public warehouses are storing facilities owned or leased by companies for their own use and have high managerial control.