(Complete) Ch. 11 distribution customer Service and logistics
Storing allows mass producers to ______.
achieve economies of scale
Galveston Machinery produces large quantities of its component parts for the oil and gas industry in Galveston, Texas. The company then ships the parts to its customers worldwide. The savings from producing in one location more than offset the added cost of transporting the parts to customers. This is an example of ______.
economies of sale
Some companies will try to centralize production by having fewer manufacturing plants that each produce in larger quantities. This requires more transporting, but offers ______.
economies of scale in production
Electronic data interchange is designed to ______.
facilitate the sharing of information along an entire supply chain
True or false: Physical distribution options should not vary endlessly in a marketing mix and in a channel system because there is one optimal solution.
false
Physical distribution happens primarily away from customers' attention. In other words, physical distribution is typically ______ to most customers.
invisible
Transporting, storing, and handling goods in ways that match target customers' needs with a firm's marketing mix is called _____.
logistics
It has been estimated that, on average, ______ of a firm's total carbon emissions come from transportation.
more than 50 percent
A firm that owns or leases a storage facility for its own use is using a ______ warehouse.
private
Storing facilities owned or leased by companies for their own use are called ______ warehouses.
private
A common problem with mass-produced goods that can be addressed by storing is that ______.
production does not match consumption
Storage facilities that are not owned or leased by a single goods-producing firm are known as _______ warehouses.
public
Joseph Enterprises Inc. produces "Chia Pets" during the holiday season in the United States. The company does not have a need for storage space on a regular basis. Joseph Enterprises should make use of a ______.
public warehouse
Kim's company makes teddy bears that sing Christmas songs and during the busy season, the company needs short-term storage space. What type of facility would be best for her company to use?
public warehouse
International shipments often travel by several different _______ modes.
shipping
To better respond to customers' needs, intermediaries should ______ stock at convenient locations.
store
Physical distribution functions must be coordinated within the channel. Marketing managers in charge of this coordination effort must decide who will ______ the goods. (Check all that apply.) -price -store -handle -transport -manufacture
store, handle, and transport
Amazon.com incurs costs every time goods are put in storage and then, again, when the goods are removed to be shipped to customers. This physical handling is considered a ______ cost.
storing
A distribution channel is part of a broader network of relationships known as a(n) ________ _________ that participates in the production, distribution, and sales of a product.
supply chain
Efficiency in distribution centers is primarily based on ______.
technology
The ______ approach involves evaluating each possible physical distribution system and identifying all of the costs of each alternative.
total cost
Zento, located in Wisconsin, airfreights fresh produce from Mexico. While air freight charges are high, the rate of spoilage and waste is low. Thia is an example of a company using the ______ _________ approach.
total cost
When a product is valuable relative to its size and weight, ______ adds little to the overall cost.
transporting
The physical distribution concept argues that logistical activities, including transportation, storage, and handling of products, should be ______.
treated as a single system for minimizing the costs of maintaining a given customer service level.
Dole Food Company is the largest producer of fruits and vegetables in the world. The company needs a mode of transportation that is able to handle relatively small quantities of goods over the short distances from its distribution centers to its customers. Dole should use ______ as a transportation method.
trucking
When moving small quantities of goods over short distances, ______ provide the most flexibility and speed.
trucks
The lowest-cost, but also the slowest, method of shipping heavy freight is by ______.
water
Which of the following transportation methods is more expensive than other modes?
Airfreight
There are trade-offs involved in physical distribution decisions. Which of the following are included in those trade-offs? (Check all that apply.) -Branding -Costs -Customer service level -Sales
Costs Customer service level Sales
Which of the following best defines storing?
It is a component of the marketing function that involves holding goods until they are needed.
Which of the following items have been replaced by electronic data interchange (EDI) in some companies? (Check all that apply.) -Federal tax returns -Customer direct mail -Shipping reports -Purchase orders
Shipping reports Purchase orders
Logistics requires transporting, storing, and handling goods in ways that match customer needs with ______.
a firm's marketing mix
The ______ function depends on the product, other physical distribution decisions and the service level that the company wants to provide.
transporting
The marketing function of moving goods is called ______.
transporting
Ideally, a product will spend ______ on distribution center shelves.
almost no time
Inventory refers to the ______ of goods being stored by a firm.
amount
What are two characteristics of a distribution center?
-Speeds the flow of goods from producer to purchaser -Minimizes storing costs
In order to improve the advantages of physical distribution, there must be ______ all the members of the channel.
cooperation among
What are three major benefits of shipping products via air? (Check all that apply.) Lower overhead costs Less spoilage Less damage Lower theft rates Less costly
less spoilage; less damage; lower theft rates
To boost sales growth, Procter & Gamble's shampoo brand, Head & Shoulders, will target remote villages in India. One of the challenges the company faces is the lack of good roads to reach the targeted consumers. The route calls for less-efficient modes of transportation. Procter & Gamble understands that transportation ______ can cost more.
in developing regions
What are two benefits of containerization?
- Increased protection of goods - Simplified handling process
Which three of the following help reduce the cost of physical handling in storing?
-Bar codes, UPC codes, and RFID tags -Locating storing facilities away from downtown traffic -Using power-operated lift trucks
Which of the following are expenses that contribute to total inventory costs?
-Cost of maintaining storage facilities -Costs of inventory becoming obsolete -Handling costs -Costs of risks such as theft and fire
Which of the following factors are bringing improvements to physical distribution practices?
-Efficient new distribution centers -Coordination among firms -More competitive markets -Improved technology
Which two of the following are possible drawbacks of private warehouses?
-Purchasing or leasing a space may be expensive. -Some space may go unused.
What are some examples of common transportation infrastructure challenges in developing countries?
-Rail systems may be limited. -Ports may be undeveloped. -Roads are often poor.
Which two of the following are possible drawbacks of private warehouses?
-Some space may go unused. -Purchasing or leasing a space may be expensive.
Which of the following statements about transporting costs are true? (Check all that apply.) -Transporting costs can in some cases significantly increase costs. -Costs associated with transporting can influence which target markets a company can serve. -Transporting costs are handled by production and have no impact on a marketing manager's tasks. -Customers are not concerned about transporting costs.
-Transporting costs can in some cases significantly increase costs. -Costs associated with transporting can influence which target markets a company can serve.
Just-in-time systems have gained popularity because they allow firms to ______.
-cut inventory costs -maintain target levels of customer service -minimize the amount of time it takes to replace inventory that has been sold
The total cost approach considers physical distribution costs that might otherwise be ignored, including ______. (Check all that apply.) -trademark and patent costs. -the cost of lost sales due to poor customer service. -inventory carrying costs. -research and development costs.
-inventory carrying costs -the cost of lost sales due to poor customer service
Although more expensive than using distribution centers, shipping finished goods directly to retail stores has several benefits, including ______.
-stronger relationships with retailers -faster delivery times -improved understanding of customer needs
Which of the following is an example of a JIT system shifting responsibility for PD activities backward in a distribution channel?
A paint supplier is highly efficient at controlling logistics costs. Products are distributed at a high customer service level.
What can companies use to improve efficiency and add value for the customer when providing a large number of products?
Data analytics
An elite fashion manufacturer distributes apparel products in retail outlets worldwide. The company chooses to forego coordinating physical distribution functions with other firms in the distribution channel. Which of the following is most likely to occur as a result?
Discord concerning issues of physical distribution
A marketing manager should never increase the total cost of distribution, even if this would result in a better customer service level for his or her target market. True or False
False
The total cost approach to physical distribution focuses exclusively on the total cost of transporting a product. True or False
False
True or false: Storing only affects the activities of the firm holding the goods.
False
What is the likely effect of information technology on physical distribution?
It can cut costs and improve service levels.
Which of the following best describes the physical distribution customer service level? -It is providing just less than enough service to meet customers' needs. -It refers to how quickly and reliably a company can provide inventory to customers. -It is the emphasis customers put on keeping storage facilities at capacity. -It involves the variety of transportation types a company is willing to provide.
It refers to how quickly and reliably a company can provide inventory to customers.
Fresh Farm Produce Co. has examined transportation costs and found that shipping its fruits and vegetables by rail to distant markets would cost them only $89,000, while airfreight would cost $250,000. The costs of the actual fruits and vegetables are the same for each transportation mode. In the context of implementing the total cost approach, what should Fresh Farm Produce do?
It should try to determine other physical distribution costs before deciding on whether to use airfreight.
Which of the following says that logistics should be treated as a single system intended to minimize the cost of distribution for a given customer service level? -Physical distribution concept -JIT -Mass marketing concept -Supply chain management
Physical distribution concept.
When firms utilize a just-in-time system, it is critical that the supplier has high ______ in all physical distribution activities.
Quality control.
Which of the following transportation methods carries more freight in the United States than any other mode?
Railroads
When Target entered the Canadian market, it struggled with deliveries and customers were disappointed by the empty shelves at the store. What was Target's reaction to this situation?
The company could not recover and closed all Canadian stores.
Which marketing function is responsible for making products available when and where the customer needs them?
Transporting
For many physical goods, firms spend half or more of their total marketing dollars on physical distribution activities. True or false
True
Most physical distribution decisions involve trade-offs among costs, the customer service level, and sales. True or False
True
True or false: Public warehouses can provide all the services that a company's own warehouse can provide.
True
Amazon.com offers speedy distribution options to its customers. These customers are willing to pay a premium for this quick delivery. In these situations, Amazon.com should use ______ as a transport method.
airfreight
A common ethical issue for Internet retailers regarding physical distribution practices concerns ______.
communicating product availability.
Transporting a group of goods in a single protective container, also known as ______, greatly simplifies the physical distribution process.
containerization
The Coca-Cola bottling company uses thousands of route drivers to ship beverages directly to retail stores. This allows for the company to deliver products more quickly, however, ______ are generally higher with this type of direct delivery.
costs
A firm that consistently delivers customers' goods quickly and accurately exhibits a high ______.
customer service level
In general, government regulation of transportation systems is ______ around the world.
decreasing
While it is true that the transporting cost of air shipments may be higher than other forms of delivery, the total cost of ____ may be lower.
distribution
A _____ is a type of storage facility that minimizes storing costs by expediting the flow of goods.
distribution center
Patricia purchases a box of Kellogg's Corn Flakes at a Publix supermarket. When the cereal is scanned, the Publix inventory system automatically sends a purchase order to Kellogg's. An automatic shipping order is then sent to the warehouse inventory system and an invoice is sent to the Publix accounting system. This is an example of ______.
electronic data interchange
In order to address problems with sharing information between different computer systems, many firms rely on ______ to create a standardized data format.
electronic data interchange (EDI)
Jonah Products operates an Internet site. They have received customer complaints because they often accept orders for products that are not available for shipping. This is a(n) ______.
ethical issue
The roads and railways required for a company to transport its' goods are a reminder of how ____ can influence transportation of products.
government
The final customer only becomes aware of physical distribution when it is ______.
inefficient Only gets their attention when something goes wrong; otherwise invisible
In coordination efforts of physical distribution, ______ sharing is most important in finding solutions to the problems that tend to arise.
information
A firm that counts the amount of goods it has stored in its warehouse is taking stock of its ______.
inventory
One thing that storing always does is ______.
involve costs
For some companies, it is possible to reduce inventory costs and maintain high levels of customer service if they can ______.
minimize the time it takes to replace items that are sold
Even though most customers desire very good service at a very low price, marketing managers must understand that it usually costs ______ to provide higher levels of service.
more
Pipelines are used by ______.
oil-producing and oil-consuming countries
Logistics is also known as ________ distribution.
physical
Another common name for logistics is ______.
physical distribution
One of the significant advantages of just-in-time inventory systems for business customers is that it reduces their ______ costs.
physical distribution
In the United States, Shell Oil primarily uses ______ to transport its crude oil and natural gas from its oil fields to its refineries.
pipelines
Silver Eagle Distributors is the sole owner of a storage facility where it stores long-term, excess inventory from its manufacturing plant. This is an example of a ______.
private warehouse
Dow Chemical is a provider of plastics, chemicals, and agricultural products. These heavy and bulky goods need to be shipped over long distances within the United States and at a moderate cost regardless of the time it takes them to reach their destination. Dow should use ______ as a transporting method.
railroads
By using the physical distribution concept, firms focus on offering targeted levels of ______ while diminishing costs.
service
Tyler Industries coordinates its channel system to ensure that members focus on the needs of the end user (customer). The overall goal is to provide a targeted level of ______ while minimizing costs.
service
Compared to a warehouse, a distribution center is
set up to speed the flow of products toward the consumer.
Best Buy places appliances on display to entice customers to buy. Each of these appliances carries the interest expense of the money used to purchased it. The appliances require costly insurance to cover the risk of fire or theft. All of these costs are associated with ______.
storing
Maintaining a supply of goods so they are available when they are needed is called ______.
storing
John Deere is the leading manufacturer of agricultural machinery in the world. To meet the needs of its customers, Deere's management must coordinate delivery of parts needed to build its tractors, harvesters, and sprayers. Deere must also coordinate deliveries to the dealers that stock and sell its products. John Deere would rely on its ______ to coordinate all of these activities.
supply chain
The Montage Co. has misunderstood their suppliers ' capabilities, resulting in production delays and unhappy customers. This is a(n) ______ _______ problem.
supply chain
The complete set of firms, facilities, and logistics activities that contribute to the production and distribution of finished or intermediate products is called the ______.
supply chain
An important development that has helped firms to coordinate activities throughout the entire supply chain has been increasing use of ______ to share information.
the internet
When choosing between transportation options, marketers should look for ______.
the lowest cost alternative that provides the required level of service
Costco offers a variety of frozen shrimp imported from Southeast Asia. There are very high shipping costs to deliver the shrimp to the retail stores, but they are less expensive than it would be to stock and maintain a supply of fresh local shrimp in each store. This saves customers money and Costco offers the product because it has calculated the ______ of choosing to sell the Asian shrimp.
total costs
Interest expense, costs of storage facilities, and costs of risks and damage are all ______ costs.
total inventory
When operating within normal parameters, which of the following transportation methods has the least amount of impact on the environment over a long distance?
trains
Through the course of transportation from producer to consumer, shipments often ______.
travel by several modes of transport
Honda Motor Company needs to ship its heavy freight (i.e., cars, trucks, and SUVs) over great distances from Japanese manufacturing facilities to international markets. Honda should use ______ as a shipping method.
water transport
