Question 1

The notion of physical distribution is

Accepted Answer

Physical distribution refers to the process of delivering products from manufacturers to end users, which includes transportation, warehousing, and inventory management. It is a critical component of supply chain management and involves the coordination of various activities to ensure timely and efficient delivery of goods. It is not limited to manufacturers or wholesalers, but rather involves all entities involved in the delivery process. Speed of delivery and distribution costs are important factors, but they are not the sole components of physical distribution.

Question 2

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

Accepted Answer

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

Question 3

The main objective of physical distribution should be to

Accepted Answer

The main objective of physical distribution should be to decrease costs while increasing service, as this approach ensures efficiency and customer satisfaction without unnecessary expenditure.

Question 4

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

Accepted Answer

Physical distribution activities can be outsourced to third-party logistics providers (3PLs) or transportation carriers. Therefore, E is the best choice as it accurately reflects the possibility of outsourcing these activities.

Question 5

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

Accepted Answer

These activities are all part of physical distribution, which involves the movement and management of goods from the point of production to the point of consumption.

Question 6

When Benetton,the Italian sportswear designer and manufacturer,decided to open its own specialty shops to sell its merchandise,the firm was engaging in

Accepted Answer

Vertical channel integration refers to a situation where a company engages in a distribution channel that includes ownership or control over more than one step in the production or distribution process. In this case, Benetton is opting to open its own specialty shops to sell its merchandise, indicating that it is vertically integrating its distribution channels.

Question 7

When channel members are linked by legal agreements that specify each member's rights and responsibilities,____ exists.

Accepted Answer

A contractual VMS is when channel members are linked by legal agreements that specify each member's rights and responsibilities. In this type of VMS, each member maintains its independence and there is no common ownership or joint liability.

Question 8

To expand the number of its retail outlets in the Washington,D.C.,area,the Dress Barn bought out a small chain of women's apparel stores in northern Virginia.This type of integration is called

Accepted Answer

The Dress Barn's expansion into the northern Virginia market through the acquisition of a small chain of women's apparel stores is an example of horizontal integration. Horizontal integration involves the merging or acquisition of companies that are in the same industry, offering similar products or services, and operating at the same level of the supply chain. In this case, the Dress Barn and the acquired chain of women's apparel stores are both in the retail industry and selling women's clothing, thus representing a horizontal integration.

Question 9

At the annual managers' planning conference,Jackie 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 percent to 90 percent.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 result in higher warehousing costs since more space will be required to store the excess inventory.

Question 10

The contracting of physical distribution tasks to third parties who do not have managerial authority within the marketing channel is known as

Accepted Answer

The term that best matches the provided definition is outsourcing, which is the practice of delegating specific business operations to an outside party, such as a third-party logistics provider, to streamline processes and reduce costs. The other options (A, B, C, and D) do not fit the definition given.

Question 11

The Limited,which produces and retails clothing products in a coordinated channel,is an example of a(n)

Accepted Answer

The Limited is an example of a corporate vertical marketing system, which means that the company controls and integrates all aspects of the distribution channel from production to retail.

Question 12

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

Accepted Answer

Danielle is outsourcing the physical distribution of her products, which involves enlisting the services of outside companies to perform functions such as shipping and technology support. Therefore, the best option is E - outsourcing. Options A, B, C, and D do not fit the description of Danielle's distribution method, which involves utilizing external parties rather than internal parties.

Question 13

The Wicks 'N Sticks candle and gift marketing organization has a(n)____ vertical marketing system arrangement with its franchised retail store operations.

Accepted Answer

The franchised retail store operations indicate that there is a contractual agreement between Wicks 'N Sticks and its franchisees, making the correct answer choice D. In a contractual vertical marketing system arrangement, independent firms at different levels of the distribution chain agree to work together through a contractual agreement, such as a franchise agreement.

Question 14

Select the greatest advantage of horizontal channel integration.

Accepted Answer

Horizontal channel integration involves the combination of organizations at the same level of the distribution channel, such as two retailers merging. The greatest advantage of this type of integration is the efficiencies it can bring to advertising, marketing research, and purchasing. By merging, the companies can pool resources and reduce costs in these areas, ultimately leading to increased profitability. The other choices are not advantages of horizontal channel integration.

Question 15

The best way to reduce overall distribution costs is to

Accepted Answer

Using a total-cost approach allows for a comprehensive analysis of the entire distribution system, including all functions and costs associated with each. This approach enables companies to identify areas where cost savings can be achieved without sacrificing service quality, while also considering the impact of changes on other parts of the system. Minimizing costs associated with materials handling and transportation, reducing the number of distribution functions, and finding the cheapest price for each function may all contribute to cost reduction, but should be evaluated within the context of a total-cost approach. Lowering service standards is not a desirable option, as it may result in loss of customers and damage to brand reputation.

Question 16

In the distribution channel for Domino's Pizza,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

The legal agreements that spell out the obligations and rights of each member indicate that this is a contractual vertical marketing system, where the channel members are linked through contracts.

Question 17

Bennetton,a leading manufacturer of knitwear in Italy,expanded its operations to include retail outlets in the United States and South America.This type of integration is called

Accepted Answer

Vertical integration refers to a company expanding its operations across different stages of the supply chain. In this case, Bennetton expanded from manufacturing knitwear to operating retail outlets, which are both part of the same supply chain. Horizontal integration would involve Bennetton acquiring or merging with another company in the same industry, while multilevel, retail, and merchandising are not applicable to this situation.

Question 18

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 outsourcing refers to hiring another company or individual to perform a business function that is usually done in-house. In this scenario, the firm is contracting its physical distribution functions to third parties, so it is outsourcing. The other options (sole-sourcing, logistics, wholesaling, and distribution services) do not accurately describe the situation.

Question 19

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

Accepted Answer

Physical distribution cost tradeoffs enable firms to utilize their resources in the most cost-effective manner. By analyzing different options and considering factors such as transportation, inventory, and packaging costs, companies can determine the most efficient way to distribute their products while minimizing costs. This may involve making tradeoffs between different distribution functions in order to achieve the best overall result.

Question 20

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

Accepted Answer

In an administered VMS, informal coordination allows for a high level of interorganizational management while still allowing the individual channel members to remain autonomous. Decision making may still be coordinated, and the goals of the individual firms may still be congruent with the overall system goals. Therefore, options A, B, C, and E are all inaccurate statements.

Quiz 14: A Supply Chain Management and Marketing Channels