Question 1

Anderson Distribution Company has purchased 15 forklifts over the past two years. As it plans to place its next order for another five machines, management wonders if additional features may be needed in order to handle changes in the product lines it carries. For Anderson, these new forklifts represent a ____ purchase.

Accepted Answer

Since Anderson Distribution Company is considering additional features for its next purchase, it suggests that the company is looking to modify its previous buying decision. Therefore, its purchase represents a modified rebuy.

Question 2

A representative product taken from a lot or batch, evaluated, and purchased refers to

Accepted Answer

This situation describes sampling, where a representative sample is taken from a larger lot or batch for evaluation and potential purchase.

Question 3

Most business purchases can be classified as belonging to one of three types:

Accepted Answer

The three types of business purchases are modified rebuy (where a company modifies an existing product or supplier), new task (where a company makes a purchase for the first time), and straight rebuy (where a company buys a product it has bought before without any modifications).

Question 4

All of the following are important concerns of business customers except

Accepted Answer

Choice C is incorrect because business customers typically seek products that meet their specifications rather than exceed them. Exceeding specifications might imply unnecessary additional costs without providing extra value to the business customer.

Question 5

Many suppliers and their customers invest time and resources to build and maintain mutually beneficial relationships which are often called

Accepted Answer

The term "partnerships" accurately describes the type of relationship where both suppliers and customers work together to achieve common goals, share risks and benefits, and build a long-term business relationship. Co-ops are typically organizations of suppliers who own and operate a business together, while monopolies refer to a situation where one company dominates a particular market. Reciprocity refers to a practice where two parties agree to exchange goods or services of equal value, while alliances typically refer to agreements where two or more parties work together for a common purpose, but may not necessarily involve a long-term relationship.

Question 6

Collin Roberts of Roberts Construction is planning to buy a piece of used earth-moving equipment. He would most likely base his purchase decision on ____ of the alternative machines.

Accepted Answer

Collin Roberts would most likely base his purchase decision on inspections of the alternative machines to assess their condition and functionality.

Question 7

The United States Navy purchases uniforms from a single supplier. For the last 25 years, the trousers purchased from this supplier have not changed and have been bought every six months, in seven different sizes. This example is called a

Accepted Answer

The described purchase is a repetitive purchase with a straight rebuy strategy. The Navy has been buying the same trousers from the same supplier for 25 years without any significant changes, and they are purchased every six months. This shows that the Navy is making a routine purchase with a straight rebuy strategy, meaning they are buying the same product from the same supplier without considering any alternatives.

Question 8

Which method of business buying is necessary when products are highly homogeneous and examination of each item is not feasible?

Accepted Answer

Sampling is the best choice when products are highly homogeneous and examination of each item is not feasible. Sampling allows for a representative subset of the products to be examined in order to make a decision about purchasing the entire batch.

Question 9

Which of the following products is most likely to be purchased on the basis of contract negotiation?

Accepted Answer

Custom-made bulldozers are typically purchased through contract negotiation because they are specialized products that require specific customization and agreements on terms, specifications, and pricing.

Question 10

St. Jude's Hospital decides to redo its kitchen with new flooring, cabinets, counters, and appliances. The hospital compiles a description of the project and then asks sellers to submit bids. After determining the most attractive bids, the hospital will then work with two or three companies to determine who will get the contract. This is an example of using ____ for a purchase decision.

Accepted Answer

The hospital is using negotiation to determine the best contractor to work with for the kitchen renovation project. They are discussing and comparing bids from different companies before making a decision.

Question 11

Which of the following is true with respect to buyers in business markets?

Accepted Answer

Business customers typically demand detailed information about a product's functional features and technical specifications to ensure that the product is suitable for their needs and can integrate into their business operations. This is because the purchase decisions made by business customers tend to be more complex and have greater potential impact on their organizations compared to consumer purchases.

Question 12

When buying materials, the purchasing agent for Alco Pillow Manufacturing Company considers a variety of factors. Which one of the following is least likely to concern this buyer?

Accepted Answer

A purchasing agent for any company is unlikely to be concerned if a supplier also sells goods to their competitors. The other factors listed, such as quality, delivery, services offered, and price, are all important considerations when making purchasing decisions.

Question 13

Perry Supply's sales and sales force have continued to expand. Now, the firm plans to add a fleet of company cars as part of its sales compensation package. For Perry Supply, these vehicles would represent a ____ purchase.

Accepted Answer

Adding a fleet of company cars to the sales compensation package is a new task purchase as this is a completely new purchase that the firm has never made before.

Question 14

Volkswagen purchases upholstery for the interiors of its vehicles from various suppliers. This upholstery must have a set of characteristics that is expressed by Volkswagen. This set is called

Accepted Answer

The set of characteristics that Volkswagen requires for the upholstery is known as specifications. This term refers to a detailed description of the features, materials, and performance requirements that a product must meet to be considered acceptable to the buyer. Specifications are an essential part of the procurement process as they help ensure that the purchased goods or services meet the buyer's needs and expectations.

Question 15

Milly's Hardware and Thames Industrial Supplier have worked closely for many years and have a mutually beneficial relationship in which Milly's provides all of Thames's hardware needs in a timely manner. Milly's and Thames's relationship could be best characterized as a(n)

Accepted Answer

A partnership is a cooperative relationship between two parties who work together for mutual benefit, which describes the relationship between Milly's Hardware and Thames Industrial Supplier.

Question 16

A representative from Coca-Cola stops by at a local fast-food restaurant once a month to inquire how much soft drink syrup the store will need. The restaurant's orders are an example of which type of business purchase?

Accepted Answer

The restaurant's orders are routine and regular, indicating a straight rebuy.

Question 17

Which method of business buying is most likely to be used when the products being purchased are standardized based on certain characteristics?

Accepted Answer

When products are standardized and can be precisely described by specifications, the description method is often used for business buying. This allows buyers to purchase items based on detailed descriptions without the need for physical inspection or sampling.

Question 18

Product specifications are best described as

Accepted Answer

Product specifications are best described as physical characteristics and level of quality.

Question 19

When a business is making its initial purchase of an item to be used to perform a new job, it is known as a ____ purchase.

Accepted Answer

A new task purchase is when a business is making its initial purchase of an item to be used to perform a new job. This is in contrast to a straight rebuy, modified rebuy, delayed, or reciprocal purchase.

Question 20

Management at Readyfresh Dry Cleaners is concerned that it maintains a high level of service for its business accounts. How should the firm monitor the level of service these customers receive?

Accepted Answer

The best way to monitor the level of service business accounts receive is by formally surveying them. This allows the company to gather feedback directly from the customers and make necessary improvements to their service. Developing a code of service, setting service objectives, specifying service uniformity, and stressing truthfulness with employees are all important practices for maintaining high levels of customer service, but they do not directly address the issue of monitoring service for business accounts.

Quiz 8: Business Markets and Buying Behavior