CLEP Principles of Marketing Study Notes

Public best suited for seasonal use private

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Public (best suited for seasonal use) & Private Warehouses – (Private Warehouses – when company stores large volumes of goods on a regular basis) 2. Distribution Centers – main function is to re-distribute stock, not store it. 3. Bonded Storage Concepts Related to Efficiency Operation & Inventory Management: 1. Order Lead Time – average length of time when customer orders & receives it. 2. Reorder Point – new orders need to be placed to avoid stock out. 3. Stock Out – shortage of product due to too few in inventory. 4. Usage Rate – rate at which inventory sold per time period. 5. Safety Stock – extra inventory 6. Economic Order Quantity (EOQ) – order size that minimizes total cost of ordering & carrying inventory. 7. Just-In-Time (JIT) – making products available when needed. Transportation Modes – moving goods from 1 location to another (5 modes: railroad, trucks, waterways, airways & pipelines). MegaCarriers – freight transport companies that provide several shipment modes. Intermodel Transportation – 2 or more transportation modes used in combination. Freight Forwarders – specialized agencies that provide alternate forms of transportation coordination. Manufacturer Wholesaling - producer does not rely on an independent firm to perform the wholesaling functions, but does it through its own sales branches and offices. Sales branches are manufacturer -owned middlemen, and sales offices are
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manufacturer-owned operations that provide services normally associated with agents. Sales branches, which fall under Manufacturers' wholesalers, are manufacturer-owned middlemen who sell products and often support the manufacturer's sales force. Sales branches act as middlemen, and perform the associated wholesale functions, such as promotion, extending credit , transporting goods, etc.. The 2 types of Manufacturer Wholesaling 1. Sales branches - manufacturer -owned middlemen who sell products & support manufacturer’s sales force. 2. Sales offices - manufacturer-owned operations that provide services normally associated with agents . Sales offices differ in that they are like manufacturer-owned agents. Merchant Wholesalers (aka: Jobbers & Distributors) - are independently owned wholesalers that take title to goods and assume the risks associated with ownership. Make up about two-thirds of all wholesalers. 2 main types of merchant wholesalers 1. Full service Merchant Wholesalers - middlemen who offer the widest possible range of wholesaling functions, and can be broken down into general merchandise, limited-line, and specialty-line wholesalers. Divided into three categories depending on how wide of a product line they carry, from general merchandise wholesalers with a wide product mix but limited depth, to specialty -line wholesalers, with a narrow, but deep product mix.
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