Marketing Test 2- CH 14

A firm has $2,000,000 in net annual sales, its beginning inventory (for the year) was $400,000 (at retail), and its ending inventory was $600,000 (at retail). The firm's stock turnover rate for the year is

4.0 times

A firm has order-processing costs of $8, an annual demand of 4,000 units, holding costs equal to 20 percent of the average inventory on hand, and wholesale unit costs of $2. What is its economic order quantity?

400 units

A firm's order lead time is 7 days, its usage rate is 5 units per day, and its safety stock is 10 units. Its reorder point is

45 units

Which of these illustrates channel cooperation?

A manufacturer granting a wholesaler credit for all sales in its territory, whether or not initiated by the wholesaler

An important characteristic of a direct channel of distribution is

a high level of channel control

central component to relationship marketing is

a long-term relationship among distribution intermediaries.

just in time inventory system

a purchasing firm reduces the amount of inventory it keeps on hand by ordering more often and in lower quantity

High-value, perishable, and emergency goods dominate which transportation form?

airways

A slotting allowance, in which retailers require that a manufacturer pay for the use of shelf space for new products, illustrates

channel conflict

Which of these is NOT a channel member?

competitors

channel of distribution

comprises all the organizations or people involved in the distribution process

total delivered product

comprises the bundle of tangible and intangible product attributes actually provided to consumers through a value chain and its related value delivery chain

Which concept is central to a pulling strategy?

derived demand

No independent intermediaries are used in which type of distribution channel?

direct

Vertical integration (such as a manufacturer's undertaking retail responsibilities through ownership) is an example of a(n)

direct channel of distribution

The tire manufacturer is interested in differentiated marketing in which it appeals to both price-conscious shoppers through mass merchandisers and to service-oriented shoppers through gasoline stations and tire specialty stores. The firm should utilize which type of distribution?

dual channels

The order volume corresponding to the lowest sum of order-processing and inventory-holding costs is known as the

economic order quantity

value delivery chain

encompasses all of the parties who engage in value chain activities

selective distribution

firm employs a moderate number of resellerscombine some channel control with good sales volume

In a just-in-time (JIT) inventory system,

firms order frequently and in lower quantities.

4 stages of the distrubution process

goals, value chain and value delivery chain, total delivered product, and level of satisfaction

containerization

goods are placed in sturdy containers that can be loaded easily

A major advantage of vertical integration (such as a manufacturer's undertaking retail responsibilities through ownership) is that it

increases control over other channel members.

Channel length refers to the

levels of independent members along a distribution channel.

distribution intermediaries

links between manufacturers/service providers and consumers

The broad range of activities concerned with efficiently delivering raw materials, parts, semifinished items, and finished products to designated places, at designated times, and in proper condition constitute

logistics.

Functions performed in a channel of distribution

marketing research, distribution, pricing, product planning, customer services, promotion, and buying

channel members

may include manufacturers, service providers, wholesalers, retailers, marketing specialists, and/or consumers

direct channel of distribution

movement of goods and services from producer to consumers without the use of independent intermediaries

Channel width refers to the

number of independent channel members at any stage of distribution.

channel width

number of independent members

equation

number of units sold/costs of goods sold divided by average inventory on hand

warehousing

physical facilities used to store , identify, sort goods in expectation of their sale and transfer within a distribution channel

For a manufacturer, the training of a wholesaler's sales personnel, providing of promotional materials, and offering a special sales contest for the wholesaler's sales personnel are important elements in which type of distribution strategy?

pushing

5 basic transportation forms

railroads, motor carriers, waterways, pipelines, and airways

Which concept in distribution is based upon the concept of long-term relationships, and partnerships between customers and their suppliers?

relationship marketing

value chain

represents the series of business activities that are performed to design, produce, market, deliver, and service a product for customers.

exclusive distribution

severly limits the number of resellers utilized in a geographic area seeking a prestige image and more control

The number of times during a stated period (usually one year) that the average inventory on hand is sold is known as

shock turnover

Vertical integration (such as a manufacturer's undertaking retail responsibilities through ownership) enables a firm to

shorten its distribution channel.

freight forwarding

specialized firms collect small shipments from several companies

computing Economic order quantity

square root of 2*demand*cost to place an order/ annual holding costs*unit cost of an item

electronic data interchange

suppliers and their organizational consumers exchange data via computer linkups

level of satisfaction

the contentment of each party is determined and related to its goals

With an administered channel arrangement

the dominant firm in the distribution process plans the marketing program and itemizes and coordinates each member's duties.

channel length

the levels of independent members

stock turnover

the number of times during a stated period that average inventory on hand is sold

The transportation method with the lowest shipping cost may not be selected due to its high inventory-carrying costs. This illustrates

the total cost approach

indirect channel of distribution

uses independent intermediaries

intensive distribution

uses large number of resellers, wide market coverage and high total sales