08: MiniTest Chapters 15 & 16
01. According to your instructor, what is one of the issues in creating a channel of distribution
NOT normally covered in business courses?
a. Direct versus indirect channels of distribution
b. The need to match the channel to the requirements of your customer.
c. The different types of intermediaries
d. Contractual versus administered systems.
e. What is it about your product that would make it attractive for channel partner to work
with you?
02. Which of the following is NOT something that could be found to be illegal under United
States Law?
a. Consumer rebates
b. Tying arrangements
c. Exclusive dealing
d. Bribery
e. Refusal to deal
03. Kendra runs a wholesale distribution center for candy. Each month she receives a shipment
of candy from her supplier. She always has enough inventory on hand so that her retail customers
can buy cases of candy whenever they need it. Kendra is adding value by ___________?
a. Creating assortment
b. Breaking wind
c. Storing
d. Transporting
e. Grading.
04. Which of the following is NOT a reason a company might want to have more than one
channel of distribution?
a. In order to earn back money that otherwise would have been earned by your retail
network.
b. Because you sell the same product to two completely different customer groups
c. To serve customers in different industries.
d. To avoid becoming dependent on a single middleperson
e. To provide local service to customers in different areas of the country.
05. Most of the functions that need to happen in order to move a product from producer to
consumer deal with?
a. Products
b. Intangibles
c. All of the above
d. Transportation
e. Money
06. According to your instructor, which of these tools used in materials handling is a recent (last
50 years) innovation that has revolutionized the shipping industry?
a. Forklifts
b. Conveyer belts
c. Gloves
d. Shipping containers
e. The wheel
07. Carlina operates an automobile parts manufacturing plant in Chillicothe, Ohio. She has
automotive customers in Michigan, Ohio, Tennessee, Georgia and Indiana. Because most of her
customers insist on Just In Time inventory management she needs to know exactly when the
shipments of her product to the customer will arrive. Carlina uses _________ transportation for
this part of her business?
a. Rail
b. Water
c. Air
d. Pipeline
e. Truck
08. One of the issues in customer service is ________ which recognizes that customer orders
cannot always be filled immediately?
a. Lead time
b. Dependability
c. Communication
d. Variability
e. Order processing
09. In dealing with logistics there is a fundamental tradeoff between ________ and ________.
The goal is to keep one high and the other low, but they tend to increase together.
a. Upstream, downstream. Incorrect
b. Cost, service Correct
c. Profit, revenue Incorrect
d. Cost, efficiency Incorrect
e. Service, responsiveness Incorrect
10. According to your textbook, Walmart uses the innovative practice of cross-docking unloading products from suppliers, sorting them, and loading them onto trucks for a particular
store. The biggest benefit to Walmart is that this practice minimizes its ___________ costs?
a. Responsiveness
b. Energy
c. Inventory
d. Cross-docking lowers all of these costs.
e. Ordering
11. Which of the following is a disadvantage of having more than one channel of distribution?
a. It could create conflict between the two channels
b. It decreases the time and effort you have to spend managing the channel.
c. It allows you to sell the same product to two completely different customer groups
d. End customers will be confused about which channel they should buy from.
e. It keeps you from becoming dependent on a large middle person.
12. Tami owned the Subway franchise in Centennial Village at San Francisco state University.
She heard that another franchisee had been granted permission to open a Subway in the student
union. She immediately complained to whoever would listen to her that the new store would take
away most of her business. This is an example of?
a. Horizontal conflict
b. Disenfranchisement
c. A price war
d. Vertical conflict.
e. Vertical integration
13. According to your instructor, the internet has had a massive disruptive effect on channels of
distribution in this country. What is the secret of success for intermediaries in the internet age?
a. An intermediary will be successful if it can become the lowest cost provider of a
particular
good or service.
b. An intermediary will be successful as long as the channel of distribution is more
efficient with them than without them.
c. An intermediary will be successful if it can differentiate its product from other
companies
providing the same good or service.
d. An intermediary will be successful if it can provide the best customer service.
e. An intermediary needs to combine with either a producer or a retailer in order to be
successful in the internet age.
14. The decision to hold inventory is critical to providing customer service through the supply
chain. There are both costs and benefits. Which of these is NOT a cost of holding inventory?
a. Inventory taxes
b. To save on capital expenditures
c. The risk of damage or spoilage
d. Materials handling costs
e. The need to purchase inventory insurance
15. The concept of _________ deals with the flow of returns, and recyclable materials from the
end user to the producer?
a. Disintermediation
b. Reverse logistics
c. Flip flopping
d. Going against the current
e. Dharma
16. Carlina operates an oil refinery in Houston Texas. She gets her crude oil from the largest
oilfield in Texas. Because the product is more or less fluid and because she knows exactly where
the raw material is coming from and where it has to go, Carlina uses _________ transportation
for this part of her business?
a. Rail
b. Pipeline
c. Truck
d. Air
e. Water
17. When I order a book from Amazon.com, an online bookseller, I receive an order
confirmation that tells me when my package will leave the Amazon warehouse, the name of the
shipper, and a link to the shipper's website that allows me to track the progress of my package
from the warehouse to my home. This way I know exactly when to expect my package. This is
an example of the use of ____________ to smooth the flow of goods and services through the
channel of distribution?
a. Payment
b. Information
c. Intermediation.
d. Permission
e. Warehousing
18. Carlina operates a wholesale lumber business serving contractors in her Midwestern city. She
takes orders from a central location and delivers the lumber and other building materials to the
contractor's jobsite using her own trucks. She orders her lumber from a mill in Washington State.
Because the lumber is bulky and she orders large quantities she uses _________ transportation
for this part of her business?
a. Rail
b. Air
c. Water
d. Pipeline
e. Truck
19. The difference between a manufacturer's selling office and a manufacturer's representative is?
a. A manufacturer's selling office takes title to the merchandise while a manufacturer's
representative does not.
b. A manufacturer's selling office handles more functions than a manufacturer's
representative
c. A manufacturer's selling office employs more people than a manufacturer's
representative.
d. A manufacturer's selling office is owned by the company while a manufacturer's
representative is an independent contractor.
e. A manufacturer's selling office has customers come to the office while a manufacturer's
selling representative calls on customers at their place of business
20. Kendra runs a wholesale distribution center for candy. Each week she receives candy from all
of the major manufacturers at her warehouse. She then puts cases of each brand of candy in her
delivery trucks so that her drivers can visit her retail customers and resupply their candy racks.
Kendra is adding value by ___________?
a. Storing
b. Grading.
c. Creating confusion.
d. Transporting
e. Breaking bulk
21. Which of the following is NOT something you would like an intermediary to provide for
your customers?
a. Alternate products
b. Communication
c. Convenience
d. Variety
e. Research
22. Starbucks recently announced that it intends to open another 20,000 stores world wide
including several in the United States. Even though it seems as if there is a Starbuck on every
corner in America, the company feels there is a need for more outlets. This is an example of
___________ distribution.
a. Exhaustive
b. Caffeinated
c. Intensive
d. Exclusive
e. Selective
23. According to your textbook, __________ is the ability to satisfy users in terms of time,
dependability, communication, and convenience?
a. Customer service
b. Service marketing
c. Supply chain management
d. Marketing
e. Reverse logistics
24. Increasingly channel partners are working together to coordinate their efforts in order to
increase the efficiency of supply chains and distribution networks. One supply network strategy
is for a retailer to share sales information with suppliers so that the suppliers can take
responsibility for replenishing the stores' inventory without the necessity of placing an order for
every shipment.
a. Upstreaming
b. Cost minimizing inventory.
c. Economic order quantity inventory management
d. Vendor managed system
e. Just in time inventory management
25. A storage warehouse creates value by?
a. Act as a transshipment point as products move from manufacturer to retailer.
b. Providing a place for last minute assembly.
c. A storage warehouse does all of these things.
d. Creating possession utility for producers
e. Holding inventory closer to where customers are likely to use it.
26. A channel of distribution helps to create form, place, time and possession _________?
a. Utility
b. Status
c. Attributes
d. Availability
e. Efficiency
27. The term ___________ refers to professionally managed and centrally coordinated marketing
channels.
a. Vertical marketing systems
b. Supply chains
c. Reintermediation
d. Distribution channel
e. Wholesale
28. Caterpillar makes heavy equipment for the construction industry. These machines are used
hard and need fast reliable service to keep them running once a customer has purchased one.
Because of this, there is only one Caterpillar dealer in any market. This is an example of
__________ distribution?
a. Intensive
b. Exclusive
c. Exhaustive
d. Selective
e. Heavy-duty
29. What is the difference between the supply chain and the value chain?
a. Supply chain is a term used in marketing textbooks while value chain is a term used in
Management textbooks.
b. Very little. The value chain concept simply recognizes that in an efficient network,
each member of the supply chain adds value to the product as it moves from raw material
to the end user
c. The supply chain concept is used with tangible products while the value chain concept
is used with services.
d. the supply chain refers to activities around the physical product while the value chain
deals with information flows associated with distribution.
e. The supply chain deals with the cost side of the product while the value chain deals
with the revenue side of the product.
30. The two major issues in supply chain management are:
a. Time and money
b. Upstream and downstream
c. Storage and transportation.
d. Revenue and costs
e. Efficiency and responsiveness.
31. Wal-Mart's basic strategy is to provide products to customers at rock bottom prices. Thus
their slogan, "Always Low Prices." In order to achieve this strategy, Wal-Mart's Supply chain is
designed to maximize ___________?
a. Variety
b. Downstream activities.
c. Upstream activities
d. Responsiveness
e. Efficiency.
32. Carlina operates a tofu making factory in Taiwan. She uses soybeans grown in Northwest
Ohio for her tofu because they are very high quality and the prices are low. Soybeans will keep
for a very long time without spoiling. Because her main concern is how to get the thousands of
bushels of soybeans to her factory for the least cost, Carlina uses _________ transportation for
this part of her business?
a. Truck
b. Water
c. Rail
d. Pipeline
e. Air
33. The biggest difference between a merchant wholesaler and an agent or broker is that the
wholesaler?
a. Deals with more than one company's products.
b. Takes ownership of the products it carries.
c. Is paid a commission on what it sells
d. Doesn't have to call on customers.
e. Doesn't bring buyers and sellers together.
34. A ________________ is the individuals and firms involved in the process of making a
product or serevice available for use or consumption by consumeres or industrial users?
a. Sales organization
b. Market
c. Marketing Channel
d. Business
e. Market segment
35. BruceCo is an inventory liquidator. The company identifies other businesses that have huge
amounts of unsold inventory buys and it from them at pennies on the dollar. They then try to find
another company that can use the inventory and sell it to them at a profit. What makes this
business so fun is that you never know from day to day what product you will be dealing in or
who might be a prospective customer. Which of these channels would be the best for BruceCo to
adopt?
a. Work with a broker to negotiate deals with any customer who wishes to purchase what
BruceCo is trying to liquidate. Correct
b. Work with a distributor who carries a variety of products and sells to a variety of
customers. Incorrect
c. Hire a manufacturer's representative to call manufacturing businesses send the orders
into BruceCo. Incorrect
d. Set up a series of regional warehouses to keep inventory nearer to the customer.
e. Sell directly to customers through a company website and charge $10 shipping and
handling for ground delivery and $20 shipping and handling for rush delivery. Incorrect
36. Increasingly channel partners are working together to coordinate their efforts in order to
increase the efficiency of supply chains and distribution networks. One supply network strategy
is for the producer to share ordering and production information with suppliers and
transportation intermediaries in order to minimize inventory by scheduling raw materials and
components to arrive at the time the producer is ready to use them to manufacture products. This
strategy is called?
a. Cost minimizing inventory.
b. Upstreaming
c. Just in time inventory management
d. Vendor managed system
e. Economic order quantity inventory management
37. Carlina operates a wholesale flower market serving florists in her city. She orders her roses
from Ecuador because the quality is good and the prices are very competitive. Because the roses
become unsalable after a day or two, Carlina uses _________ transportation for this part of her
business?
a. Rail
b. Air
c. Water
d. Pipeline
e. Truck
38. Which of the following is NOT a cost typically associated with logistics?
a. Stockout.
b. Order processing
c. Storage
d. Materials handling
e. Product development
39. Most of the functions that need to happen in order to move a product from producer to
consumer deal with?
a. Transportation
b. All of the above
c. Money
d. Intangibles
e. Products
40. In a market with producers and six retailers, the addition of a wholesaling middleman can
decrease the number of transactions needed to have an efficient market form 24 to 10. This is an
example of?
a. The learning curve.
b. Disintermediation
c. The economy of transactions
d. Economies of scale
e. Disruptive innovations
41. Which of the following is NOT a cost typically associated with logistics?
a. Transportation
b. Inventory
c. Advertising
d. Stockout.
e. Order processing
42. I can't believe it, said Wiley Coyote, I am the president of Acme enterprises and we make
$200,000 a year profit with me working my tail off. Our distributor, Road Runner
Representatives, made over $800,000 in commissions. I don't understand why they are making
all of that money when all they do is run around all day and say beep-beep to customers. I think
we should lower the commission rate to bring their income down to a more reasonable level.
This is an example of?
a. Horizontal conflict
b. Vertical conflict.
c. A price war
d. Suspended animation
e. Vertical integration
43. The _______________ concept recognizes that there are a set of functions that need to
happen in order to move a product from the producer to the consumer?
a. Utility
b. Intermediary
c. Channel flow
d. Value
e. Four "P's"
44. An indirect channel of distribution consists of?
a. A producer, a wholesaler, and a retailer.
b. A customer, a retailer, and a producer
c. A producer and a customer
d. A producer and a retailer
e. A retailer and a customer
45. Which of the following is NOT an example of a third-party provider of logistics?
a. A parcel delivery company
b. A freight forwarder
c. A design firm
d. An export/import firm
e. A fulfillment company.
46. In discussing the impact of the internet on channels of distribution, we talked about
disintermediation and reintermediation. What do we mean by disintermediation?
a. These are all examples of disintermediation.
b. That the lack of personal contact with internet-based businesses is a turn-off for many
customers.
c. That intermediaries need to move their businesses from brick and mortar buildings to
virtual businesses online.
d. That in the internet age, customers will insist on dealing directly with the manufacturer.
e. That intermediaries that specialized in functions performed more efficiently by the
internet will disappear.
47.Which of the following is NOT an issue typically addressed through distribution?
a. Market Coverage
b. Advertising
c. Returns and recycling
d. Service level
e. Inventory management
48. Kendra runs a wholesale distribution center for candy. Each week she receives candy from all
of the major manufacturers. She stamps a date sticker on each package so the retailers will know
how fresh the candy is. She also provides information on how much cocoa is in the chocolate
from the various manufacturers. Kendra is adding value by ___________?
a. Breaking bulk
b. Creating assortment
c. Storing
d. Grading.
e. Transporting
49. BruceCo sells medical devices used in surgical operations. It requires a great deal of training
t be able to use these medical devices properly and there is a potential liability to BruceCo if they
are used improperly. Because each product has to be numbered and monitored for quality and
sanitation, the products must be handled carefully and are expensive. Which of these channels
would be best for BruceCo?
a. Work with a cash and carry distributor.
b. Sell directly to doctors or hospitals shops through a company website and charge $10
shipping and handling for ground delivery and $20 shipping and handling for rush
delivery.
c. Work with a broker to negotiate deals with each of the hospitals who wish to carry
BruceCo products.
d. Set up a series of regional warehouses to keep inventory nearer to the customer.
e. Hire a skilled sales force to call on surgeons and educate them about the risks and
benefits of your devices.
50. Which of the following statements best describes the relationship between marketing strategy
and supply chain management?
a. Supply chain management dictates what your marketing strategy should be.
b. Supply chain management is a separate issue from marketing strategy.
c. Supply chain management is a tool that can help you implement your marketing
strategy.
d. You cannot develop a sound marketing strategy until you have your supply chain in
place.
e. Good supply chain management will compensate for a poor marketing strategy.
51. The supply chain centers on the producer. Upstream activities consist of?
a. Market research and product concept testing before production begins
b. Gaining permits and licenses in order to be able to operate the business.
c. The flow of raw materials from the supplier to the producer
d. The flow of finished product from the producer to the end user
e. The channel flows that deal with information.
52. A(n) ____________ is an individual or firm that serves as a go-between when moving
products from producer to consumer?
a. Intermediary
b. Principal
c. Supplier
d. End user
e. Designer
53. A channel of distribution always includes?
a. An intermediary
b. A customer
c. A raw materials supplier
d. A wholesaler
e. All of the above
54. Sometimes, even there is no formal agreement, a channel of distribution operates as a
centrally controlled system. Usually this is when one member of the channel is so powerful
relative to the others that it can tell the others what to do. This is an example of ___________?
a. Wholesaler cooperative
b. Franchising
c. Administered system
d. Buying organization
e. Backward integration.
55. Materials handling deals with loading and unloading products and moving them from place
to place. One of the biggest issues in material handling is?
a. Damage control
b. Keeping track of where things are
c. All of these are issues associated with materials handling
d. Breakage
e. Theft
56. Which of the following is an example of a direct channel of distribution?
a. My niece Polly who sells hand-made jewelry at tables she rents at craft shows and art
fairs.
b. These are all direct channels of distribution.
c. The Avon Corporation which has company-paid salespeople sell cosmetics door to
door
d. My brother in law Don who custom builds homes for customers on their property.
e. The Dell Corporation which sells computers to consumers through its company owned
website.
57. Kendra runs a wholesale distribution center for candy. Each week she receives candy from all
of the major manufacturers and repackages it so that a retailer can buy a case of candy bars and
have some from every manufacturer in the case. Kendra is adding value by ___________?
a. Transporting
b. Disintermediating
c. Storing
d. Grading.
e. Creating assortment
58. Coca Cola's basic strategy is they you should never be more than an arms length away from a
cold, refreshing Coke. In order to achieve this strategy they try to make Coke products available
for sale through as many outlets as possible. You can buy bottled Coke in the grocery store,
fountain coke at a restaurant, single cans and bottles at convenience stores and gas stations, and
individual cans from vending machines while you are waiting in line for a ride at an amusement
park. Because the goal of the supply chain is to maximize __________, Coke is willing to bear
the expense of having several different channels of distribution?
a. Downstream activities.
b. Variety
c. Upstream activities
d. Efficiency.
e. Responsiveness
59. Thomas Friedman wrote a book about the impact of new technologies and other trends
impacting the way business is conducted in the world called The World is Flat. One of the basic
premises is that widespread adoption of internet protocols and the seamless connection of
computer systems along the supply chain allowing for the efficient flow of ___________ to help
smooth the flow of goods from raw materials to end user.
a. Payment
b. Technology
c. Information
d. Intermediation
e. Permission
60. The decision to hold inventory is critical to providing customer service through the supply
chain. There are both costs and benefits. Which of these is NOT a benefit of holding inventory?
a. Make it possible to save money buy buying in volume.
b. To create time utility for customers
c. To create possession utility for producers
d. Serve as a hedge against inflation for price-sensitive goods.
e. Serve as a buffer against supply interruptions
61. Thomasville furniture decided to reduce the number of dealers carrying its line fine furniture.
Stores who wished to carry Thomasville were required to dedicate at least 10,000 square feet in
their store for a Thomasville gallery. This meant that only the larger dealers in a given market
would be able to carry Thomasville. This is an example of?
a. Exhaustive
b. Selective
c. Discriminating
d. Exclusive
e. Intensive
62. Unlike a storage warehouse, a distribution center is primarily for?
a. Vertical integration
b. Reintermediation
c. Transshipment of products
d. Climate control
e. Storage
63. A direct channel of distribution consists of?
a. A retailer and a customer
b. A producer and a retailer
c. A producer and a customer
d. A customer
e. A producer, a truck, and a retailer.
64.One of the ways intermediaries create value is to?
a. Specialize in one or more channel functions in order to become better at it than others
in the channel.
b. These are all ways that intermediaries create value.
c. Invest in trucks that are much more expensive than other companies in the channel can
afford.
d. Provide a buffer between consumer and producer so individuals don t feel like they are
dealing with a large corporation.
e. Increase the amount of money customers are willing to pay for a good or service.
65. In order to make sure that potential customers had an opportunity to try their new products
under the most favorable conditions, the Apple Computer company began opening a number of
retail stores that carry the full line of Apple products and accessories. This is an example of
____________?
a. Forward integration
b. Wholesaler sponsored
c. Franchising
d. Backward integration
e. Administered channels
Answers:
01. e
02. a
03. c
04. a
05. b
06. d
07. e
08. a
09. b
10. c
11. a
12. a
13. b
14. b
15. b
16. b
17. b
18. a
19. d
20. d
21. a
22. c
23. a
24. d
25. e
26. a
27. a
28. b
29. b
30. e
31. e
32. b
33. b
34. c
35. a
36. c
37. b
38. e
39. d
40. c
41. c
42. b
43. c
44. b
45. c
46. e
47. b
48. d
49. e
50. c
51. c
52. a
53. b
54. c
55. c
56. b
57. e
58. e
59. c
60. c
61. b
62. c
63. c
64. a
65. a