Deck 16: Wholesaling and Physical Distribution

Question 1

Wholesaling includes:

A) sales made by manufacturers to retailers.
B) sales made by wholesalers to retailers.
C) sales made by manufacturers to wholesaling middlemen.
D) sales made by retailers to other retailers.
E) all of the above.

Answer 1

all of the above.

Question 2

Wholesaling includes:

A) sales made by Kraft Foods to Transvaal wholesale grocers.
B) sales made by Eby-Brown wholesaler to convenience stores.
C) sales made by Ingle's supermarkets to Linda's restaurant.
D) sales made by Kraft Foods to The Olive Garden restaurant chain.
E) all of the above.

Answer 2

all of the above.

Question 3

Whether a given transaction is classified as a wholesale sale or as a retail sale depends essentially on:

A) whether the seller is a wholesaler or a retailer.
B) the buyer's intended use of the product.
C) whether the seller procured the product from a manufacturer or a wholesaler.
D) whether the product involved is sold at wholesale or retail price.
E) the quantity of goods involved.

Answer 3

the buyer's intended use of the product.

Question 4

Which of the following is an example of a wholesaling transaction?

A) To fix a mannequin's broken finger, the manager of a clothing store buys a tube of super glue at a
Convenience store.
B) An engineer buys a set of Lionel trains for his son.
C) A florist buys a bouquet of roses for his mother.
D) A farmer sells a bushel of peanuts to a man who loves to make and eat homemade peanut butter.
E) Through her brother's business connections, a woman buys a new top for her convertible.

Question 5

Which of the following is an example of a wholesaling transaction?

A) An Olympic athlete buys a plane ticket for his mother's trip to the competition.
B) A photographer buys film for his mother's camera.
C) An architect buys a box of pencils for his daughter's birthday.
D) A caterer buys a gross of wine glasses to use at a wedding she is catering.
E) A farmer buys a package of melon seeds for his garden.

Question 6

Which of the following statements about the economic justification for wholesaling is True?

A) Wholesaling skills are provided by a relatively large number of organizations that sometimes duplicate
Each others' efforts.
B) Wholesaling does not create transaction economies.
C) Wholesalers can typically perform wholesaling functions more efficiently than most manufacturers
Can.
D) Manufacturers are more effective at performing many of the wholesaling tasks than wholesalers.
E) Wholesaling creates integrated marketing communications economies.

Question 7

Which of the following statements about the economic justification for wholesaling is True?

A) Wholesalers are better able to sell to ultimate consumers than other resellers.
B) Economies of scale result from the specialization of wholesaling middlemen performing functions that . might otherwise require several departments within a manufacturer's organization.
C) Wholesalers do not create economies of skill.
D) Transaction economies are introduced into wholesaling when the channel of distribution is direct.
E) All of the above statements about the economic justification for wholesaling are True.

Question 8

Why is the total sales volume of wholesale trade always greater than the total volume of retail sales (even
Though retail prices are generally higher than wholesale prices)?

A) Wholesalers typically handle larger-quantity sales.
B) Agent middlemen and manufacturers' sales offices do not take title to the products they sell.
C) Many products sold by retailers are purchased directly from the producer, thus bypassing wholesalers.
D) Wholesalers rarely sell at discounted prices.
E) Wholesaling establishments sell to businesses and to other wholesalers as well as to retailers.

Question 9

Which of the following statements about merchant wholesalers is True?

A) Brokers and commission merchants are types of merchant wholesalers.
B) Merchant wholesalers have significantly declined in number during the last decade.
C) Merchant wholesalers are of less importance than agent middlemen.
D) Merchant wholesales are independently owned firms that do not take title to the products they
Distribute.
E) Merchant wholesalers are independently owned firms that engage primarily in wholesaling and take . title to the products they distribute.

Question 10

Merchant wholesalers:

A) are the smallest segment of wholesaling firms when measured by number of establishments.
B) are independently owned firms that engage primarily in wholesaling and take title to products being
Distributed.
C) are independently owned firms that do not take title to the products being distributed.
D) are manufacturer-owned organizations that perform primarily wholesaling tasks for their owner
Companies.
E) engage in both wholesaling and retailing activities for manufacturers and consumers.

Question 11

NISA is the name of a United Kingdom operation that purchases and supplies a full range of branded
Products and private-branded products to its retail customers. It stocks anything and everything you
Would expect to find in any supermarket from a tin of Heinz beans to a box of Kellogg's cornflakes. NISA is probably a:

A) merchant wholesaler.
B) manufacturer's sales facility
C) manufacturers' agent
D) broker
E) agent wholesaling middleman

Question 12

Which of the following statements about agent wholesaling middlemen is True?

A) Agent wholesaling middlemen are owned and operated by retail chains.
B) Agent wholesaling middlemen are independently owned firms that take title to the products they
Distribute.
C) Truck jobbers and drop shippers are types of agent wholesaling middlemen.
D) Agent wholesaling middlemen are independently owned firms that engage primarily in wholesaling and . do not take title to the products they distribute.
E) There are more agent wholesaling middlemen than merchant wholesalers.

Question 13

Agent wholesaling middlemen:

A) are wholesaling organizations that are owned and operated by manufacturers.
B) are often classified by product line that they distribute.
C) are independently owned organizations that do not take title to products being distributed.
D) include truck jobbers and drop shippers.
E) do not carry stock of merchandise being distributed.

Question 14

A(n) _____ is owned and operated by a manufacturer but is physically separated from the manufacturing
Plant.

A) merchant wholesaler
B) manufacturer's sales facility
C) manufacturers' agent
D) broker
E) agent wholesaling middleman

Question 15

To see if you are looking at a manufacturer's sales branch or a manufacturer's sales office, you should
Note:

A) the types of customers it sells to.
B) whether it carries a stock of the products it sells.
C) the number of services it provides.
D) the type of manufacturer that owns it.
E) its costs of operation.

Question 16

A _____ is a type of manufacturer's sales facility, which does not carry an inventory of the product being
Sold.

A) manufacturer's sales branch
B) middleman broker
C) manufacturer's sales office
D) product agent
E) drop shipper

Question 17

If a contractor goes to a manufacturer's sales facility to buy ceiling tile, and the wholesaler sells him the
Ceiling tile and helps him load his purchases into the back of his truck, the wholesaling this middleman would be classified as a:

A) manufacturer's sales branch.
B) middleman broker.
C) manufacturer's sales office.
D) product agent.
E) drop shipper.

Question 18

Why are the average operating expenses for agent wholesaling middlemen substantially lower than those
For merchant wholesalers?

A) Agent wholesaling middlemen perform fewer services.
B) Agent wholesaling middlemen have higher initial markups on their products.
C) The primary customers of agent wholesaling middlemen are industrial users.
D) Agent wholesaling middlemen never carry inventory.
E) Agent wholesaling middlemen are more efficient.

Question 19

Full-service wholesalers:

A) perform most of their services for manufacturers and very few for retailers.
B) are rarely involved in financing.
C) do not take risks.
D) are similar to brokers in that they do not take title to the products they distribute.
E) are described by none of the above.

Question 20

The Alabama Paper Company serves business customers throughout Alabama. It has a diverse product Line with over 5,000 different paper-related items. It performs a wide-range of services for its customers Including financing, risk taking, inventory management, and physical distribution. Alabama Paper is an
Example of a:

A) manufacturer's sales branch.
B) middleman broker.
C) manufacturer's sales office.
D) product agent.
E) full-service wholesaler.

Question 21

Cotter & Company is a full-service wholesaler of hardware. What type of service can it perform for Hardware store owners?

A) financing
B) risk taking
C) selling
D) market information
E) all of the above

Question 22

Cotter & Company is a full-service wholesaler of hardware. Which of the following services is it LEAST Likely to perform for its customers?

A) market information
B) transportation
C) subdividing
D) decision making
E) financing

Question 23

To maintain their competitiveness and boost profits, full-service wholesalers are striving to improve their Own operations by:

A) partnering with manufacturers.
B) expanding their assortment of services.
C) adopting advanced technology.
D) enhancing service quality.
E) doing all of the above.

Question 24

_____ carry a selected line of perishable products and deliver them by trucks to retail stores.

A) Full-service wholesalers
B) Rack jobbers
C) Truck jobbers
D) Commission merchants
E) Drop shippers

Question 25

Jeff Beauseigneur wants to open a convenience store in Kingsville. What kind of wholesaler should he Contact for the chewing gum, tobacco products, candy bars, and other snack foods he will sell in his Store?

A) a desk jobber
B) a commission merchant
C) a truck jobber
D) a manufacturer's sales office
E) a broker

Question 26

Which of the following products would most likely be distributed by a truck jobber?

A) bricks
B) radiator hoses
C) swim suits
D) chewing gum
E) ceiling tile

Question 27

A _____ is a limited-function merchant wholesaler that does not physically handle the product it sells but Is responsible for getting the product from the producer to the customer.

A) selling agent
B) rack jobber
C) truck jobber
D) commission merchant
E) drop shipper

Question 28

A drop shipper will most likely be used by a producer-supplier that is marketing:

A) bricks.
B) bookshelves.
C) leather boots.
D) rocking horses.
E) air deodorizers.

Question 29

Which of the following statements about agent wholesaling middlemen is True?

A) The major types are manufacturers' agents and brokers.
B) They have higher operating expenses than merchant wholesalers.
C) They are paid a flat fee for the services they perform.
D) Their relative importance has been increasing for many years.
E) They take title to the products they distribute.

Question 30

When compared to merchant wholesalers, agent wholesaling middlemen typically:

A) have fewer customers.
B) sell more technically complex products.
C) deal with a more widely dispersed customer base.
D) sell products with relatively large gross margins.
E) are accurately described by all of the above.

Question 31

A _____ is an independent agent wholesaling middleman that sells part or all of a manufacturer's product Mix in an assigned geographic territory.

A) truck jobber
B) manufacturers' agent
C) broker
D) selling agent
E) commission merchant

Question 32

A producer-supplier would most likely pick an agent wholesaling middleman instead of a merchant Wholesaler when the product:

A) is restocked frequently, like dairy products.
B) is made to order, like a presentation guitar.
C) is being sold to geographically dispersed customers.
D) is a technologically complex computer system.
E) has a large gross margin.

Question 33

A producer-supplier would most likely pick a merchant wholesaler instead of an agent holesaling Middleman when the product:

A) has a low gross margin.
B) is standard operating supplies, like brooms and mops.
C) can be sold with long lead times for delivery.
D) has a very small target market.
E) is made to order, like reproductions of Victorian furniture.

Question 34

Typically, manufacturers' agents:

A) do not operate in assigned sales territories.
B) are given a salary by their producer-suppliers.
C) are used more in dense, established markets than in newer territories.
D) handle noncompeting, but related, product lines.
E) do not work on a continuing basis with their principals.

Question 35

How do manufacturers' agents help their producers-suppliers?

A) Manufacturers' agents provide postsale service.
B) Manufacturers' agents bulk-break large shipments.
C) Manufacturers' agents sell.
D) Manufacturers' agents transport the product quickly.
E) Manufacturers' agents store the product for inventory control.

Question 36

Brose, a German manufacturer, is the world's biggest producer of the components that sit inside car Doors and do the job of adjusting windows, locks, wing mirrors, and hi-fi systems. What type of agent middleman would most likely handle this manufacturer's products?

A) truck jobber
B) manufacturers' agent
C) drop shipper
D) broker
E) commission merchant

Question 37

The manufacturers for which independent agent wholesaling middlemen sell are frequently referred to As:

A) channel captains.
B) licensors.
C) intermediaries.
D) principals.
E) contractors.

Question 38

Which of the following manufacturers would be most likely to use a manufacturers' agent to distribute its Product?

A) a well-established, international company
B) a large cereal manufacturer that has developed a new eggnog-flavored cereal
C) a well-established Southwestern firm that wants to expand its market area by making its products . available for the first time in New York and New Jersey
D) an international sporting goods manufacturer that wants to add a line of snow toboggans
E) a company that wants to introduce product line extensions to its current market

Question 39

Which of the following statements about manufacturers' agents is True?

A) Manufacturers' agents receive a flat annual fee for services performed.
B) Manufacturers' agents carry stock.
C) Manufacturers' agents are not typically equipped to furnish customers with technical support.
D) Manufacturers' agents do not work on a continuing basis with their principals.
E) Producer-suppliers hire manufacturers' agents to set prices for them.

Question 40

A _____ is an independent agent wholesaling middleman that brings buyers and sellers together and Provides marketing information to either party.

A) selling agent
B) manufacturers' agent
C) drop shipper
D) broker
E) commission merchant

Question 41

A broker would most likely be used by a producer-supplier that is marketing:

A) fresh produce.
B) lawn furniture.
C) communication systems for offshore oil drilling sites.
D) limited-edition ceramic dolls.
E) any of the above.

Question 42

The main service brokers provide to their producer-suppliers is their ability to:

A) finance.
B) warehouse.
C) furnish market information.
D) create assortments.
E) conduct market research for buyers.

Question 43

When Fadil Karam decided to sell 5 acres of land, he contacted Christina Whiten. She showed the land To a young couple who wanted a home site, explained to them about the market for land in the area, and negotiated the sales terms. She left the final decision about the sale up to Karam and the young couple. Whiten is most likely a:

A) selling agent.
B) manufacturers' agent.
C) drop shipper.
D) broker.
E) commission merchant.

Question 44

The manager of the Yazoo City Catfish Producers knows the market for its catfish is geographically quite Large. Price and supply conditions vary considerably from season to season. Since Yazoo City can sell its catfish only a few months each year, it does not need continuous market representation. The catfish producers should use a:

A) selling agent.
B) manufacturers' agent.
C) drop shipper.
D) broker.
E) commission merchant.

Question 45

A _____ essentially substitutes for a marketing department by marketing a manufacturer's entire Output.

A) selling agent
B) manufacturers' agent
C) drop shipper
D) broker
E) auction company

Question 46

A selling agent:

A) plays a key role in the distribution of perishable products, such as fresh-cut flowers.
B) specializes in international marketing.
C) is a form of merchant wholesaler.
D) is used in selling real estate and securities.
E) takes the place of a manufacturer's marketing department by marketing the producer's entire output.

Question 47

A selling agent will most likely be used when the seller:

A) wants to retain considerable control over promotion and distribution policies.
B) wants a middleman to take over all marketing tasks.
C) wants distribution in a market currently not covered by its sales force.
D) is strong financially and sells installation-type industrial goods.
E) markets its products only during the summer months.

Question 48

Auction companies will most likely be used in the wholesaling of:

A) bricks, slate, gravel, and sand.
B) living room sets, bedroom sets, and dining room furniture.
C) fruit, tobacco and used cars.
D) computers, satellite dishes, and VCRs.
E) store fixtures.

Question 49

A(n) _____ specializes in international marketing and arranges for distribution of goods in foreign Countries.

A) foreign liaison
B) commission merchant
C) trade broker
D) international brokerage house
E) import-export agent

Question 50

Which of the following statements best describes import-export agents?

A) Import-export agents deal only with agricultural products.
B) Import-export agents are kinds of selling agents.
C) Import-export agents offer a full range of services to buyers and sellers.
D) Import-export agents bring together buyers and sellers from different countries.
E) Import-export agents are a type of merchant wholesaler.

Question 51

Physical distribution:

A) creates time and place utility.
B) is also called logistics.
C) deals only with tangible products.
D) consists of the activities involved with getting a product from the manufacturer to the customer's Location.
E) is accurately described by all of the above.

Question 52

Physical distribution:

A) consists of all the activities concerned with moving the right amount of the right products to the right Place at the right time.
B) occurs during the control stage of the strategic marketing plan.
C) has little impact on the cost of products.
D) deals with the movement of products, not their storage.
E) includes package design and sales promotions.

Question 53

Physical distribution includes which of the following activities?

A) transportation
B) implementation of a pricing strategy
C) selection of middlemen
D) identification of the target market
E) market segmentation

Question 54

Which of the following is NOT one of the interdependent subsystems that are part of an effective physical Distribution system?

A) order processing
B) transportation
C) inventory control
D) production maintenance
E) materials handling

Question 55

Gary is the logistics manager for a manufacturer of optical lenses. His areas of responsibility will most Likely include:

A) inventory location and warehousing.
B) order processing.
C) transportation.
D) materials handling.
E) all of the above.

Question 56

In which of the following departments of a plant that assembles small engines is major cost reduction Most likely to occur (given that the plant operates like most plants in the U.S.)?

A) human resources management department
B) accounting department
C) legal affairs department
D) shipping department
E) advertising department

Question 57

According to the text, opportunities to cut costs, gain a competitive edge, and/or better satisfy customers Through changes in physical distribution have been made possible by:

A) the stringent rewriting of international import-export regulations.
B) deregulation in the transportation industry.
C) the development of larger, lightweight barges.
D) the development and implementation of computer-controlled-distribution (CCD) software.
E) the development of on-site distribution centers.

Question 58

Last December, Lala Ashworth ordered large gift baskets to be sent to her 12 most lucrative customers From an e-commerce retailer. In February, while talking to one of the customers, she asked him how he liked his basket. She was horrified to learn he had not received it. Upon investigation, she found that four baskets had arrived in perfect condition, six had arrived crushed into small pieces, and two had never arrived. Ashworth experienced a problem associated with:

A) in-sourcing.
B) order fulfillment.
C) telemarketing.
D) vendor analysis.
E) transaction misalignment.

Question 59

_____ entails having the merchandise that is ordered by a customer in stock and then packing and Shipping it in an efficient, timely manner.

A) Shipping analysis
B) Transactional marketing
C) Relational management
D) Fulfillment
E) In-sourcing

Question 60

Who handles e-commerce fulfillment in specific product areas for manufacturers and conventional Retailers?

A) online category managers
B) e-retailers
C) online fulfillment experts
D) e-commerce brokers
E) e-commerce specialists

Question 61

_____ represents a total system perspective of distribution, combining distribution channels and physical Distribution.

A) The customer-distribution matrix
B) The systems approach to marketing
C) Integrated marketing distribution (IMD)
D) Supply chain management
E) Materials handling

Question 62

Worldwide Chain Stores is a(n) ______ system installed across the world by a number of leading Distribution companies. The system provides real time information and covers all activities from the Raising of a purchase order by a customer for stock replenishment, to the production of member invoices after delivery is complete.

A) the customer-distribution
B) economies of scale
C) integrated marketing distribution (IMD)
D) supply chain management
E) materials handling.

Question 63

KingMeritus is a wholesaler of automobile parts for the OEM market and the aftermarket. The Company is working to reduce its costs. According to a company vice president, KingMeritus will begin "monitoring its suppliers and other members of its distribution channels, and when necessary, quickly collaborating with them to improve quality and to reduce costs and solve problems early." In other words, KingMeritus is going to make greater use of:

A) the customer-distribution matrix.
B) the systems approach to marketing.
C) integrated marketing distribution (IMD).
D) supply chain management.
E) materials handling heuristics.

Question 64

The core of supply chain management (SCM) is:

A) electronic data interchange.
B) just-in-time inventory management.
C) calculating economic order quantities.
D) containerization.
E) coordinated logistics.

Question 65

Which of the following statements about supply chain management (SCM) is True?

A) The core of SCM is coordinated logistics.
B) The total cost concept is an integral part of SCM.
C) SCM can improve on-time delivery and reduce necessary inventory levels.
D) As part of implementing SCM, many companies are contracting out their physical distribution Function.
E) All of the above statements about SCM are True.

Question 66

Which of the following statements about supply chain management (SCM) is True?

A) SCM will only work if the organization focuses on the individual costs of each distribution activity.
B) The responsibility for logistics activities with SCM should be delegated to a variety of different Departments.
C) Contract logistics has been used with supply chain management.
D) For SCM to be effective, all logistics tasks must be performed in-house.
E) None of the above statements about SCM is True.

Question 67

A producer-supplier of fresh seafood knows airfreight is the highest priced method of transportation. He Also knows the quicker he can move inventory, the lower his inventory costs will be, and the fewer sales he will lose due to out-of-stock conditions or product perishability. In designing his physical distribution system, he is using _____ to look at the big picture.

A) the total cost concept
B) the customer satisfaction matrix
C) supply chain management
D) production-oriented marketing concepts
E) the hierarchy of effects

Question 68

The term outsourcing is defined as:

A) hierarchical management.
B) organizational consultation.
C) a costing concept.
D) contracting out.
E) reducing the number of suppliers.

Question 69

Which of the following activities will optimize the physical distribution of products?

A) The traffic department is primarily concerned with minimizing shipping cost per ton-mile.
B) The only concern of the marketing department is to improve customer service.
C) The finance department is concerned only with reducing inventory costs.
D) The production manager, without consulting any other department, orders longer production runs to Cut unit costs.
E) None. All of the above reflect the traditional fragmented, inefficient approach to physical distribution.

Question 70

Douglas Craven is the physical distribution manager for Custom Chrome, a company that manufactures Over 9,500 chrome engine parts for motorcycles. To implement the total cost concept, Craven should:

A) consider physical distribution as a materials-flow problem.
B) distribute only to areas with a large number of motorcycle owners.
C) use the lowest-cost transportation consistent with safe handling of chrome engine parts.
D) strive to determine the set of activities that produces the best relationship between costs and profits for . the entire physical distribution system.
E) use air freight and thus eliminate warehousing costs.

Question 71

Many companies are outsourcing their physical distribution function through a process called:

A) contract logistics.
B) marketing mix outsourcing.
C) functional logistics.
D) direct sourcing.
E) indirect sourcing.

Question 72

Manufacturers are using contract logistics because it:

A) allows the firm to concentrate on its core business.
B) allows a third-party to act with a greater level of directness.
C) minimizes customer dissatisfaction with a product's promotional description.
D) creates a whole new mission for the manufacturer using it.
E) allows Internet marketers to make a profit.

Question 73

Bibby Distribution is the largest family-owned logistics supplier in the United Kingdom. Early in the 1990s, Lucite International decided to find a company to manage all its warehousing, sorting, and Distribution activities. Bibby Distribution won this contract. Bibby Distribution provides Lucite with:

A) contract logistics.
B) marketing mix outsourcing.
C) functional logistics.
D) direct sourcing.
E) indirect sourcing.

Question 74

Fresh cut flowers typically last about two weeks. Moving them quickly from the fields in the Andes Mountains where they are grown to consumers is important-the quicker the flowers reach florists, the more the florists can charge consumers for them. Ceres Flowers, Inc. is a company that expedites the transportation of flowers imported from South America by having its personnel meet the flowers when they reach Miami and escort them through customs and into distributors' trucks several hours faster than happens without its services. Ceres Flowers is an example of a(n):

A) third-party logistics provider.
B) marketing mix outsourcer.
C) channel captain.
D) import/export agent.
E) supply chain ombudsman.

Question 75

UPS Logistics manages the transportation carriers, its service parts inventory, field stocking, and central Warehousing for Compaq Computer Company. UPS Logistics is an example of a(n):

A) third-party logistics provider.
B) marketing mix outsourcer.
C) channel captain.
D) import/export agent.
E) supply chain ombudsman.

Question 76

Saturn's manufacturing plant uses a computerized system that directs trucks to deliver preinspected Parts at specific times 21 hours a day, six days a week to one of the plant's 56 receiving docks. Ryder Integrated Logistics is charged with making sure the Saturn plant has what it needs to build Saturn cars at the time it is needed. Ryder Integrated Logistics is a(n) _____ for Saturn.

A) third-party logistics provider
B) marketing mix outsourcer
C) channel captain
D) import/export agent
E) supply chain ombudsman

Question 77

Which element of the marketing mix is LEAST likely to be directly affected by the strategic management Of physical distribution?

A) promotion
B) pricing
C) distribution
D) product
E) all elements are affected equally

Question 78

CDW sells 800,000 products from hundreds of companies to small- and medium-sized businesses. The Company fills some 17,000 orders daily. Ninety-nine percent of the orders received at CDW are sent out the day they are received so long as the product is in stock. This ability to process orders quickly indicates _____ has an important place in CDW's physical distribution strategy.

A) price stabilization
B) customer service
C) form utility
D) third-party logistics
E) channel power

Question 79

How could Sun Valley Floral Farms, a producer of fresh-cut flowers, benefit from the strategic use of Physical distribution?

A) improved customer service
B) reduced distribution costs
C) the creating of time and place utility
D) price stabilization
E) all of the above

Question 80

A manufacturer of flotation devices for boats would primarily use physical distribution to:

A) eliminate seasonality in production cycles.
B) select the lowest priced transportation.
C) create time and place utility.
D) create form utility.
E) eliminate warehousing.