Which of the following statements is true?
A) Direct distribution approaches usually require less investment capital than indirect approaches.
B) Intermediaries that pay for products when they purchase them and pay the costs of carrying inventory help a producer's cash flow.
C) Public warehouses and transportation firms increase the capital needed for logistics facilities.
D) More capital is needed when intermediaries take on responsibility for promotion.
E) Control is higher if indirect distribution is used.

Question

Quizplus · Accepted Answer

Intermediaries who purchase products and carry inventory help with a producer's cash flow because rather than having a large sum tied up in inventory waiting for end customers to purchase, the producers can receive payment from intermediaries when they make a purchase. This can often be helpful for smaller businesses with limited capital.

Which of the Following Statements Is True