Question 1

Which of the following statements concerning physical distribution trade-offs is NOT true?

Accepted Answer

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

Question 2

Honda requires its brake suppliers to deliver parts to its production plants three hours before the parts are scheduled to be installed in a new car. This is an example of what logistics activity?

Accepted Answer

A JIT system usually requires that a supplier respond to very short order lead times and the customer's production schedule.

Question 3

The right physical distribution system should be based primarily on

Accepted Answer

First, a firm should decide what service level to offer based on customer expectations and needs. Then, it should try to minimize the cost of distribution for that level.

Question 4

Which of the following observations about the total cost approach is NOT true?

Accepted Answer

In a total cost approach, the possible costs of lost sales due to a lower customer service level may also be considered.

Question 5

When planning physical distribution, the marketing manager should:

Accepted Answer

When planning physical distribution, the marketing manager should minimize the cost of distribution for a given customer service level.

Question 6

The physical distribution concept says (or implies) that:

Accepted Answer

The physical distribution (PD) concept says that all transporting, storing, and product-handling activities of a business and a whole channel system should be coordinated as one system that seeks to minimize the cost of distribution for a given customer service level.

Question 7

The "physical distribution concept" is probably being used in a firm if:

Accepted Answer

The physical distribution (PD) concept says that all transporting, storing, and product-handling activities of a business and a whole channel system should be coordinated as one system.

Question 8

Which of the following is true regarding JIT systems?

Accepted Answer

A JIT system usually requires that a supplier respond to very short order lead times and the customer's production schedule.

Question 9

Just-in-time (JIT) delivery

Accepted Answer

A key advantage of JIT for business customers is that it reduces their PD costs.

Question 10

The ______________ concept says that all transporting, storing, and product-handling activities of a business and a channel system should be thought of as part of one system which should seek to minimize the cost of distribution for a given customer service level.

Accepted Answer

The physical distribution (PD) concept says that all transporting, storing, and product-handling activities of a business and a whole channel system should be coordinated as one system that seeks to minimize the cost of distribution for a given customer service level.

Question 11

The "total cost approach" to physical distribution management:

Accepted Answer

In selecting a PD system, the total cost approach involves evaluating each possible PD system and identifying all of the costs of each alternative.

Question 12

Just-in-time (JIT) delivery:

Accepted Answer

A JIT system usually requires that a supplier respond to very short order lead times and the customer's production schedule.

Question 13

Physical distribution decisions interact with which other marketing mix decisions?

Accepted Answer

PD decisions interact with Product, Promotion, and Price decisions.

Question 14

After evaluating all of its alternatives and the costs of each, Vegpro Kenya decided the most efficient way to quickly get its fresh vegetables from Nairobi to European cities was to use air freight. What approach did it use in making this decision?

Accepted Answer

By using the total cost approach, Vegpro Kenya compared different PD systems for shipping ready-to-eat fresh produce from fields in Kenya to grocery stores in major European cities.

Question 15

In a firm that fully implements the physical distribution concept:

Accepted Answer

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

Question 16

A merchant wholesaler is considering four physical distribution systems and estimates the total cost and customer service level for each as follows: The best alternative is:
$$\begin{array} { l r c } 
& \text { TOTAL COST } & \text { CUSTOMER SERVICE LEVEL } \
\text { Airfreight } & \$ 1,000,000 & 90 \% \
\text { Inland waterways } & 250,000 & 50 \% \
\text { Truck } & 300,000 & 60 \% \
\text { Rail and warehouse } & 425,000 & 70 \%
\end{array}$$

Accepted Answer

The best alternative depends on the merchant wholesaler's priorities regarding cost versus customer service level, which requires understanding the target customers' preferences.

Question 17

Fresh Farm Produce Co. has examined transportation costs and found that shipping its fruits and vegetables by rail to distant markets would cost them only $89,000, while airfreight would cost $250,000. Because the costs of the actual fruits and vegetables are the same for each transportation mode, Fresh Farm Produce should

Accepted Answer

In selecting a PD system, the total cost approach involves evaluating each possible PD system and identifying all of the costs of each alternative.

Question 18

Which of the following statements about just-in-time delivery is FALSE?

Accepted Answer

JIT reduces PD costs for business customers, especially storing and handling costs. But it increases costs for suppliers.

Question 19

A good marketing manager will try to:

Accepted Answer

First, a firm should decide what service level to offer based on customer expectations and needs. Then, it should try to minimize the cost of distribution for that level.

Question 20

Information technology helps physical distribution in what ways?

Accepted Answer

Information technology can sometimes improve service levels and cut costs at the same time.

Quiz 11: Distribution Customer Service and Logistics

Which of the following statements concerning physical distribution trade-offs is NOT true?

Honda requires its brake suppliers to deliver parts to its production plants three hours before the parts are scheduled to be installed in a new car. This is an example of what logistics activity?

The right physical distribution system should be based primarily on

Which of the following observations about the total cost approach is NOT true?

When planning physical distribution, the marketing manager should:

The physical distribution concept says (or implies) that:

The "physical distribution concept" is probably being used in a firm if:

Which of the following is true regarding JIT systems?

Just-in-time (JIT) delivery

The ______________ concept says that all transporting, storing, and product-handling activities of a business and a channel system should be thought of as part of one system which should seek to minimize the cost of distribution for a given customer service level.

The "total cost approach" to physical distribution management:

Just-in-time (JIT) delivery:

Physical distribution decisions interact with which other marketing mix decisions?

After evaluating all of its alternatives and the costs of each, Vegpro Kenya decided the most efficient way to quickly get its fresh vegetables from Nairobi to European cities was to use air freight. What approach did it use in making this decision?

In a firm that fully implements the physical distribution concept:

Which of the following statements about just-in-time delivery is FALSE?

A good marketing manager will try to:

Information technology helps physical distribution in what ways?