Chapter 14

e. Order processing

Electronic data interchange (EDI) is most effective for which type of logistics activity? a. Inventory management b. Materials handling c. Transportation d. Warehousing e. Order processing

a. True [Supply chain management (SCM) integrates the functions of operations management, logistics management, procurement, and marketing channel management so that products are produced and distributed in the right quantities, to the right locations, and at the right times.]

Supply chain management includes procurement, logistics management, and operations management activities. a. True b. False

a. True [Walmart dominates the supply chain for its retail stores by virtue of the magnitude of its resources (especially information management) and a strong, nationwide customer base. It is most likely to be the channel captain in the market channels in which it is involved.]

Walmart is most likely to be a channel captain in the supply chain. a. True b. False

a. selective distribution

Which market coverage is often used to motivate retailers to provide adequate service? a. Selective distribution b. Intensive distribution c. Intermediate distribution d. Exclusive distribution e. Extensive distribution

c. the channel member resists policies that are anticompetitive or in restraint of trade

A manufacturer has the legal right to refuse to do business with a channel member unless _______. a. the supplier is the only firm able to provide products of a certain quality b. competition is promoted among dealers handling different brands c. the channel member resists policies that are anticompetitive or in restraint of trade d. the intermediary is free to carry competing products as well e. dealers and customers in a given market have access to similar products

b. tying agreement

ACME Corp. sells hammers and other tools to Blue's Hardware Store. Suppose that ACME, which is the only supplier of a specific type of hammer that Blue's sells, informs Blue's that it will have to purchase certain other products from ACME if it wants to continue receiving the hammers. Blue's is dismayed because these other products are costly. It has no need for these products. ACME is attempting to get Blue's to enter into _______. a. restricted sales territories b. a tying agreement c. a refusal to deal d. a vertical integration partnership e. exclusive dealing

a. third-party logistics firm

BSNF Logistics is a third-party organization that companies can use to help with their logistics needs. BSNF claims that it has strong capabilities in land, air, water, and rail services. It creates customized solutions to meet a variety of logistics needs for its customers. BSNF Logistics maintains that it has strong expertise in core logistics activities and can often perform these activities more efficiently. BSNF is most likely a(n) _______. a. third-party logistics firm b. industrial distributor c. megacarrier d. wholesaler e. manufacturer's agent

d. exclusive dealing

Fila Sports Oceania is a subsidiary of an Italian company that owns apparel rights for certain teams in the Australian Football League. Fila introduced a policy in which retailers could not feature Fila products in the same stores as other licensed products from its rivals. The Australian Competition and Consumer Commission ruled this as anticompetitive. Fila was most likely forcing its retailers into ___________. a. tying agreements b. full-line forcing c. refusal to deal agreements d. exclusive dealing e. restricted sales territories

a. industrial distributor

Grainger specializes in products that are used to maintain, repair, and operate facilities (MRO products). Grainger takes title to products and carries inventories. It also offers services such as inventory management and support. Grainger is most likely a(n) _______. a. industrial distributor b. megacarrier c. channel captain d. third-party logistics firm e. private warehouse

c. horizontal channel integration

In 2015, Heinz and Kraft Foods merged into one company. This is most likely an example of _______. a. multichannel distribution b. logistics c. horizontal channel integration d. vertical channel integration e. strategic channel alliance

a. vertical channel integration

In addition to producing the popular iPhone and iPad, Apple also helps design the components as well as the processors. It also owns its own retail stores. Apple therefore operates in the hardware, software, services, and retail industries. This is an example of _______. a. vertical channel integration b. horizontal channel integration c. channel leadership d. channel conflict e. channel cooperation

c. Railroad

Jake is looking for a way to transport low-sulfur coal. He would like to choose a transportation mode that will get his product to its destination in a reasonable time period. He also needs the transportation mode he chooses to carry large quantities of this coal, but he would like to keep costs down. Which mode of transportation should Jake use? a. Pipeline b. Airplane c. Railroad d. Truck e. Waterway

a. manufacturer's agent

Mallory loves her job. She sells complementary products of several producers in assigned territories and is compensated through commissions. Mallory is highly effective at selling these products and is able to earn a high income from commissions. The best part is she never actually owns the products she sells. She acts more as a salesperson. Mallory is most likely a(n) _______. a. manufacturer's agent b. megacarrier c. wholesaler d. industrial distributor e. logistics manager

a. True [Procurement (sometimes called supply management) actually involves the processes to obtain resources to create value through sourcing, purchasing, and recycling including materials and information.]

Procurement involves the processes to obtain resources to create value through sourcing, purchasing, and recycling including materials and information. a. True b. False

d. Place utility

Redbox places its vending machines in easy-to-reach areas around pharmacies, grocery stores, discount stores, and more. Most customers of Redbox purchase video and game rentals around dinnertime, so the fact that many of the machines are located close to grocery stores is a strategic move that benefits both Redbox and the store. Redbox manages its selection by keeping track of what movies are being ordered frequently at that location. The individual kiosks inform the company about past purchases, and the company can adjust the availability of DVDs or Blu-rays based on this information. Customers can also reserve movies online. Redbox launched a streaming service called Redbox On Demand to compete with Netflix. Consider that Redbox locates its kiosks close to shopping centers where customers can pick up a movie while out shopping for food or other supplies. Based upon this, what type of utility do Redbox's kiosks offer to consumers? a. Form utility b. Cost utility c. Possession utility

b. procurement [Procurement involves the processes to obtain resources to create value through sourcing, purchasing, and recycling including materials and information.]

Redbox places its vending machines in easy-to-reach areas around pharmacies, grocery stores, discount stores, and more. Most customers of Redbox purchase video and game rentals around dinnertime, so the fact that many of the machines are located close to grocery stores is a strategic move that benefits both Redbox and the store. Redbox manages its selection by keeping track of what movies are being ordered frequently at that location. The individual kiosks inform the company about past purchases, and the company can adjust the availability of DVDs or Blu-rays based on this information. Customers can also reserve movies online. Redbox launched a streaming service called Redbox On Demand to compete with Netflix. George is in charge of working with movie studios and third-party distributors to purchase DVDs and Blu-ray discs to be made available through the kiosks. His only responsibility is to procure the movies and games for the different kiosks. Purchasing specifically falls under ____

c. Inventory management

Redbox places its vending machines in easy-to-reach areas around pharmacies, grocery stores, discount stores, and more. Most customers of Redbox purchase video and game rentals around dinnertime, so the fact that many of the machines are located close to grocery stores is a strategic move that benefits both Redbox and the store. Redbox manages its selection by keeping track of what movies are being ordered frequently at that location. The individual kiosks inform the company about past purchases, and the company can adjust the availability of DVDs or Blu-rays based on this information. Customers can also reserve movies online. Redbox launched a streaming service called Redbox On Demand to compete with Netflix. Redbox kiosks keep track of what movies are being ordered frequently at that location. The individual kiosks inform the company about past purchases, and the company can adjust the availability of DVDs or Blu-rays its uses to supply the kiosks based on this information. These act

a. True [For nearly a century, courts have held that producers have the right to choose or reject the channel members with which they will do business. Within existing distribution channels, however, suppliers may not legally refuse to deal with wholesalers or dealers merely because these wholesalers or dealers resist policies that are anticompetitive or in restraint of trade.]

Refusal to deal is legal as long as suppliers do not refuse to deal with intermediaries simply because they resist policies that are anticompetitive. a. True b. False

c. Intensive distribution

Scenario 14.1 Redbox places its vending machines in easy-to-reach areas around pharmacies, grocery stores, discount stores, and more. Most customers of Redbox purchase video and game rentals around dinnertime, so the fact that many of the machines are located close to grocery stores is a strategic move that benefits both Redbox and the store. Redbox manages its selection by keeping track of what movies are being ordered frequently at that location. The individual kiosks inform the company about past purchases, and the company can adjust the availability of DVDs or Blu-rays based on this information. Customers can also reserve movies online. Redbox launched a streaming service called Redbox On Demand to compete with Netflix. Refer to Scenario 14.1. What type of market coverage is Redbox most likely to use? a. Extensive distribution b. Selective distribution c. Intensive distribution d. Exclusive distribution e. Intermediate distribution

d. channel conflict

Suppose you roast coffee and sell it to Maximum Markets. You have a good relationship with Maximum Markets and have relied on them for many years to display your coffees in its stores. Your marketing chain has been relatively short, going from you (the producer) to the reseller (Maximum Markets) to the end consumer. However, you recently received an offer to sell your coffee in other retail stores, some that compete directly with Maximum Markets. You also would like to start selling directly through your website. You decide to provide discounts for coffee sold online. Integrating more channel members and selling to customers directly is likely to cause _________ with Maximum Markets. a. channel integration b. channel cooperation c. vertical integration d. channel conflict

b. Boeing 777 Freighter

Which of the following is most likely to use exclusive distribution? a. Apple iPad b. Boeing 777 Freighter c. Microsoft Office Suite d. Ford vehicles e. Nespresso coffee machines

d. Target

Which of the following is most likely to use the channel where the good goes from producer to retailer to end consumer? a. Caterpillar b. Sysco c. Hershey d. Target e. Netflix

a. Kimberly-Clark

Which of the following would most likely use intensive distribution? a. Kimberly-Clark b. Rolex c. Prada d. Dell e. Sony

c. consumer relationship management

_______ systems exploit the information in supply chain partners' information systems and make it available for easy reference. a. Logistics management b. Strategic channel alliance c. Customer relationship management d. Procurement e. Channel captain

a. Transportation [Transportation, the movement of products from where they are made to intermediaries and end users, is the most expensive logistics function.]

_________ is the most expensive logistics function. a. Transportation b. Materials handling c. Order processing d. Inventory management