MK Ch 13 MP
62) ________ includes planning the infrastructure to meet demand, then implementing and controlling the physical flows of materials and final goods from points of origin to points of use to meet customer requirements at a profit. A) Market logistics B) Containerization C) Transportation D) Nonstore retailing E) Wholesaling
A) Market logistics
73) True or False: Companies who want to carry near-zero inventory should build for order, not for stock.
True
65) Optimal order quantities exist when the curves for the order-processing cost per unit and inventory-carrying cost per unit ________. A) are collinear B) are diagonal to each other C) intersect D) are parallel to each other E) equal zero
C) intersect
12) An independent retailer using a central buying organization and joint promotion efforts with other retailers is part of a ________. A) corporate chain store B) voluntary chain C) retailer cooperative D) merchandising conglomerate E) franchise organization
C) retailer cooperative
23) True or False: Full-service retailers generally have the lowest costs of all retail types.
False
26) True or False: A superstore is a storeless retailer serving a specific clientele who are entitled to buy from a list of retailers that have agreed to give discounts in return for membership.
False
28) True or False: Department stores only face competition from other department stores as other retailing forms pose little threat to their sales and profitability.
False
30) True or False: Growth in the retail market is centered firmly in the middle market, leaving luxury retailers and discounting specialists struggling.
False
32) True or False: Retailers are increasingly likely to reach their customers by using a single channel.
False
50) True or False: Private-label or store brands are also known as generics.
False
69) True or False: Wholesalers exclude manufacturers and farmers because they are engaged primarily in production, but include retailers, as they are selling to the end consumer.
False
71) True or False: More stocking locations mean goods can be delivered to customers more quickly, and warehousing and inventory costs are lower.
False
61) ________ refers to buying large carload lots and dividing them into smaller units before shipping them out to consumers. A) Bulk breaking B) Containerization C) Wholesaling D) Warehousing E) Broking
A) Bulk breaking
66) ________ consists of putting goods in boxes or trailers that are easy to transfer between two transportation modes. A) Containerization B) Haulage C) Inventory carrying D) Order processing E) Warehousing
A) Containerization
13) Which of the following is TRUE for the retail industry? A) Retailers are experimenting with "pop-up" stores that let them create buzz. B) Upscale retailers see a decline in sales as middle-market retailers thrive. C) Fast fashion is offering more choice and longer-lived products. D) Technology use by stores is driving up the cost of inventory. E) Discount stores are not doing as well as middle-market retailers.
A) Retailers are experimenting with "pop-up" stores that let them create buzz.
18) Which of the following is a prepurchase service offered by retailers? A) accepting orders over the telephone B) shipping the product C) delivery to the customer's doorstep D) general information E) interior decoration of the retail outlet
A) accepting orders over the telephone
17) Most retailers will put low prices on some items in order to increase traffic to the store. These low-priced products are known as ________. A) loss leaders B) price ceilings C) price skimmers D) price floors E) cold calls
A) loss leaders
8) A factory outlet is an example of a(n) ________ retailer. A) off-price B) specialty C) discount D) department E) catalog
A) off-price
56) Which of the following wholesaler functions reduces inventory costs and risks to suppliers and customers? A) selling and promoting B) warehousing C) transportation D) market information E) assortment building
B) warehousing
57) ________ includes all the activities in selling goods or services to those who buy for resale or business use. A) Retailing B) Wholesaling C) Procurement D) Promoting E) Warehousing
B) warehousing
64) A reorder point of 10 means ordering the product ________. A) every 10 days B) when stock falls to 10 units C) every 10 units D) when stock falls to 9 units E) in batches of 10 items
B) when stock falls to 10 units
59) The owner of supermarket chain Reynold's wants to offer nonfood items such as greeting cards and magazines. However, Reynold's does not want to take care of setting up displays and maintaining inventory records. Which of the following types of wholesalers can help Reynold's meet customer demand while minimizing costs? A) producers' cooperatives B) cash and carry wholesalers C) truck wholesalers D) drop shippers E) rack jobbers
E) rack jobbers
1) ________ includes all the activities in selling goods or services directly to final consumers for personal, nonbusiness use. A) Wholesaling B) Retailing C) Procurement D) Promoting E) Warehousing
B) Retailing
10) Which of the following is an example of direct marketing? A) E&OE sells its herbal skincare products exclusively through its stand-alone stores. B) TCJ is a telemarketing firm that sells products from a number of different suppliers. C) Jayne's sells most of its products to customers through home sales parties. D) J3 is a storeless retailer that organizes the retail activity of the employees of four firms. E) Reynold's tries to minimize its staff costs by installing vending machines in its stores.
B) TCJ is a telemarketing firm that sells products from a number of different suppliers.
58) Which of the following is considered a wholesaler? A) retailer B) broker C) producer D) manufacturer E) farmer
B) broker
21) Stores are using ________ to measure a product's handling costs from the time it reaches the warehouse until a customer buys it in the retail store. A) electronic data interchange (EDI) B) direct product profitability (DPP) C) radio-frequency identification (RFID) D) global positioning systems (GPS) E) compounded annual grown rate (CAGR)
B) direct product profitability (DPP)
9) Companies that sell products door-to-door or at home sales parties are engaging in ________. A) franchising B) network marketing C) direct-response marketing D) corporate selling E) direct marketing
B) network marketing
67) If the shipper owns its own truck or air fleet, it becomes a ________ carrier. A) containerized B) private C) contract D) common E) diversified
B) private
49) Because shelf space is scarce, many supermarkets now charge a ________ for accepting a new brand, to cover the cost of listing and stocking it. A) retainer B) slotting fee C) residual fee D) contingent fee E) royalty
B) slotting fee
7) E&OE produces and markets its own brand of skincare products using herbal remedies and natural ingredients through stand-alone stores as well as an online portal. E&OE is a(n) ________ retailer. A) off-price B) specialty C) discount D) department E) extreme value
B) specialty
22) Which of the following is the strongest differentiator for brick-and-mortar stores who want to emphasize their superiority over online retailers? A) product quality B) the shopping experience C) product range D) pricing E) the retailer's reputation
B) the shopping experience
60) Which of the following is TRUE of brokers? A) Brokers represent buyers or sellers on a permanent basis. B) Most brokers are hired by sellers and work for a salary. C) Brokers bring buyers and sellers together and assist in negotiation. D) Selling brokers have contractual authority to sell a manufacturer's entire output. E) Brokers assume title and risk from the time an order is accepted to its delivery.
C) Brokers bring buyers and sellers together and assist in negotiation.
47) ________ are unbranded, plainly packaged, less expensive versions of common products such as spaghetti, paper towels, and canned peaches. A) Common carriers B) Shills C) Generics D) Private labels E) Marques
C) Generics
48) In addition to its store brands and nationally well-known brands of detergents, Reynold's also carries much cheaper varieties of detergents that are not advertised and have little-known names. They are often manufactured from lower-quality ingredients and save on packaging and advertising costs. These are known as ________. A) common carriers B) shills C) generics D) private labels E) marques
C) Generics
14) Why would a retailer measure direct product profitability (DPP)? A) because DPP is highly correlated with the gross margin on a product B) because handling expenses are negligible compared with gross margin C) because handling costs can make products less profitable D) because gross margin on a product is too difficult to measure accurately E) because DPP removes the impact of paperwork expenses
C) because handling costs can make products less profitable
11) A(n) ________ is a storeless retailer serving a specific clientele-usually employees of large organizations-who are authorized to buy from a list of retailers that have agreed to give discounts in return for inclusion on the list. A) direct-selling vendor B) direct marketing vendor C) buying service D) automatic vendor E) corporate retailer
C) buying service
19) Which of the following is a postpurchase service offered by retailers? A) accepting orders over the telephone B) advertising and window displays C) delivery to the customer's doorstep D) general information E) interior decoration of the retail outlet
C) delivery to the customer's doorstep
5) Which of the following is an example of a limited-service retailer? A) Customers at TAB pick out the products they want and pay at the checkout counter. B) Salespeople at Eli are always on hand to offer shoppers advice and assistance in choosing products. C) Mina's allows customers to check out their own purchases in order to reduce the staff count. D) CLO's offers a number of merchandise-return privileges, customers need information and assistance while shopping. E) Alison's stocks a number of specialty products and the store's salespeople generally help shoppers with all their needs.
D) CLO's offers a number of merchandise-return privileges, customers need information and assistance while shopping.
2) Which of the following is an example of retailing? A) Dylan's sends catalogs to retail, industrial, and institutional customers. B) SEZ U Inc. sells a limited line of fast-moving goods to small retailers for cash. C) BEL Inc. sells consumer packaged goods to merchant wholesalers and distributors. D) Praxis International sells products to consumers directly through the Internet. E) Hub Styles procures its raw materials directly from farmers in the region.
D) Praxis International sells products to consumers directly through the Internet.
46) Which of the following is TRUE for distributor brands? A) They sell at higher volumes than national brands and are also known as generics. B) They are usually sold at higher prices than national brands because production costs are higher. C) They are always of better quality than national brands as production is strictly monitored. D) They can generate a higher profit margin because of their lower cost structure. E) Advertising costs for distributor brands are much higher than those for national brands.
D) They can generate a higher profit margin because of their lower cost structure.
4) A large staff, along with a higher proportion of specialty goods and slower-moving items and many services, are usually features of ________ retailing. A) self-service B) self-selection C) limited service D) full-service E) limited-selection
D) full-service
20) Which of the following is an ancillary service offered by retailers? A) accepting orders over the telephone B) advertising and window displays C) delivery to the customer's doorstep D) general information E) alterations and tailoring
D) general information
15) Discount stores typically fall into the ________ group with respect to margins and volume. A) mixed-markup, high-volume B) low-volume, mixed-markup C) low-volume, low-markup D) high-volume, low-markup E) high-markup, lower-volume
D) high-volume, low-markup
3) Discount stores that try to keep prices as low as possible are more likely to function using ________ operations. A) limited service B) self-selection C) full-service D) self-service E) limited-selection
D) self-service
6) An example of a restaurant with a narrow and deep assortment is a ________. A) small lunch counter B) cafeteria C) large restaurant D) fast-food restaurant chain E) delicatessen
E) delicatessen
16) A store selling expensive artwork and luxury goods typically falls into the ________ group with respect to margins and volume. A) mixed-markup, high-volume B) low-volume, mixed-markup C) low-volume, low-markup D) high-volume, low-markup E) high-markup, low-volume
E) high-markup, low-volume
63) The elapsed time between an order's receipt, delivery, and payment is called the ________ cycle. A) variable-costs-to-payment B) product-to-payment C) inventory-to-sale D) order-to-inventory E) order-to-payment
E) order-to-payment
45) Walmart developed the Ol'Roy brand of dog food to sell only in its stores. Ol'Roy is an example of a ________. A) generic product B) national brand C) franchise D) copy-cat brand E) private label
E) private label
44) A brand developed by a retailer and or wholesaler that is available only in selected retail outlets is called a ________ brand. A) generic B) franchisee C) marque D) national E) private-label
E) private-label
24) True or False: The network marketing sales system works by recruiting independent businesspeople who act as distributors.
True
25) True or False: Electronic shopping is a form of direct marketing.
True
27) True or False: "Pop-up" stores let retailers promote brands to seasonal shoppers for a limited time.
True
29) True or False: Shopper marketing is the way manufacturers and retailers use stocking, displays, and promotions to affect customers while they are in a store.
True
31) True or False: Firms are increasingly recognizing the importance of influencing consumers at the point of purchase.
True
33) True or False: Featuring exclusive national brands that are not available at competing retailers is a way of differentiating a retailer.
True
34) True or False: Some high-volume products may have such high handling costs that they are less profitable and deserve less shelf space than low-volume products.
True
51) True or False: The lower price of generics is made possible by lower-cost labeling and packaging and minimal advertising, and sometimes lower-quality ingredients.
True
68) True or False: Wholesaling includes all the activities in selling goods or services to those who buy for resale or business use.
True
70) True or False: Supply chain management starts before physical distribution.
True
72) True or False: Inventory cost increases at an accelerating rate as the customer-service level approaches 100 percent.
True