14 Aug 1. Beyond the optimal order quantity, total cost per unit increases because ____

1. Beyond the optimal order quantity, total
cost per unit increases because ________.
a. inventory-carrying cost per unit increases
b. inventory-carrying cost per unit decreases
c. order-processing cost per unit rises
d. order-processing cost per unit falls more
rapidly
e. order-processing cost per unit falls more
slowly

2. Companies are reducing their inventory
costs by treating inventory items differently, positioning them according to
risk and opportunity. High-risk,
low-opportunity items are known as ________.
a. nuisance items
b. bottleneck items
c. commodities
d. critical items
e. containerized items

3. ________ consists of putting goods in boxes
or trailers that are easy to transfer between two transportation modes.
a. Containerization
b. Private labeling
c. Inventory carrying
d. Order processing
e. Warehousing

4. If the shipper owns its own truck or air
fleet, it becomes a ________.
a. containerized carrier
b. private carrier
c. contract carrier
d. common carrier
e. diversified carrier

5. In deciding on the method or means of
transportation, shippers consider such criteria as speed, frequency, ________,
capability, availability, traceability, and costs.
a. air versus ground
b. gypsy truckers
c. dependability
d. branded name truckers
e. costs per mile

6. Today customers want more frequent
deliveries, shorter order-cycle times, direct store deliveries, mixed pallets,
tighter promised times, and ________ packaging, price tagging, and display
building.
a. colorful
b. childproof
c. custom
d. easy opening
e. theftproof

7. Market-logistics strategies must
be derived from ________, rather than solely from cost considerations.
a. competitive analysis
b. low-cost considerations
c. cost strategies
d. business strategies
e. marketing strategies
Answer: d

True/False

8. Retailing includes all the activities
involved in selling goods or services directly to final consumers for personal,
nonbusiness use.
:

9. Any organization selling to the final
consumers is doing retailing. However, it matters howthe goods or
services are sold and where they are sold.
10. Retailers can position themselves as
offering one of four levels of service.
However, self-selection and self-service are the same in discount
retailers.

11. An off-price
retailer is one in which the retailer has a broad selection of
high-markup, fast-moving, brand-name goods in stock.

12. Full service
retailers have salespeople who are ready to assist the customers in every phase
of their shopping trip.

13. Nonstore
retailinghas not been
growing as fast as traditional store retailing.

14. Corporate retail organizations achieve
economies of scale, greater purchasing power, wider brand recognition, and
better-trained employees.

15. All of the benefits in a franchising system
accrue to the franchisor because the franchisor is able to concentrate the risk
and effort associated with running a store in the hands of the franchisee.

16. The two models of the traditional
department stores responses to competition is to develop a store with strong
retail brand approaches and the showcase store.

17. Department stores today are exclusively
worried about competition from other department stores. Other retailing forms are not a threat to
department stores sales and profitability.

18. One of the up and coming trends in
retailing is the growth of giant
retailers,knownas category killers and supercenters.

19. Today, growth in the retail market is
centered firmly in the middle market, leaving luxury retailers and discounting
specialists struggling.

20. The retailers product assortment does not
need to match the target markets shopping
expectations.

21. A retailers real challenge begins after
defining the stores product assortment, and that is to develop a
product-differentiation strategy.

22. Retailers are generally eager to
stock new products, making it difficult for manufacturers to keep older, but
proven brands on the shelves.

23. Because of the high cost of retail
space, most retailers are highly attuned to which of the products they stock
generate profit.

24. Prices are a key positioning
factor to retailers and must be decided in relation to the target market.

25. The amount of time shoppers spend in a
store is perhaps the single most important factor in determining how much they
will buy.

26. Paco Underhill
suggests that retailers, to increase sales volume, make their shoppers hunt for
the merchandise. His logic is this: While hunting, the shopper will be
exposed to more and more products, thus the likelihood increases that the
shopper will purchase impulse items, thus increasing their overall purchase
total.

27. One of a retailers most important
decisions is location, location, location.

28. There is generally a relationship
between high customer traffic and high rents in choosing a retail location.

29. Private-label merchandise is also
known as store, house, or distributor brands.

30. Retailers develop their own store brands
to differentiate themselves from other retailers and the national branded
merchandise.

31. The lower price of generics is made
possible by lower-quality ingredients, lower-cost labeling and packaging, and
minimal advertising.

32. The growing power of store brands is not
weakening the national brands due to the national brands increases in
advertising and research and development.

33. Wholesaling includes all the
activities involved in selling goods or services to those who buy for resale or
business use. Wholesaling includes manufacturers and farmers who sell directly
to consumers.

34. Wholesaler-distributors have not
faced the pressures in recent years from new sources of competition, demanding
customers, new technologies, or more direct-buying programs.

35. Because wholesalers do not
actually manufacture a product, they are unable to effectively manage asset
productivity.

36. Supply chain management starts
when the product comes off the factory floor and enters the
distribution/transportation channels.

37. Market logistics involves 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.
38. Integrated logistics systems involves
materials management, material flow systems, and electronic distribution.

39. Today information systems play a
critical role in managing market logistics, especially computers, satellite
tracking, and electronic funds transfers.

40. Choosing a market-logistics system calls
for examining the total cost (M) associated with different proposed systems and
selecting the system that minimizes it, where T (total freight costs) + FW
(total fixed warehouse cost) + VW (total variable warehouse costs) is expressed
as M = T + FW + VW.

41. One of the four major decisions that must
be made about market logistics is: How much inventory do we keep in the
warehouse?

42. The order-to-payment
cycleis the elapsed time between an orders receipt, delivery, and payment
by the customer.

43. Order-processing costs must be compared
with inventory-carrying costs because as the amount of stock carried
increases, the higher the inventory-carrying costs.
44. Inventory costs increases at a decreasing
rate as customer-service levels approach 100% fulfillment.
45. The choice of transportation
methods of distribution have negligible effects on the prices charged for the
product and therefore marketers need not be overly involved in this process.

46. The logistics system must be information
intensive and establish electronic links among all the significant parties.

47.
In
shipping goods to its warehouses, dealers, and customers, the company can
choose between five transportation modes: rail, air, truck, waterway, and
pipeline.

Essay

101.
The wheel-of-retailing
hypothesis explains one reason that new store types emerge. Explain this
hypothesis and delineate the four service levels available to retailers.

102.
Although
the overwhelming bulk of goods and services are sold through stores, nonstore
retailing has been growing much faster than store retailing. Nonstore
retailing falls into four major categories. List and briefly define each
category.
1. Beyond the optimal order quantity, total
cost per unit increases because ________.a. inventory-carrying cost per unit increasesb. inventory-carrying cost per unit decreasesc. order-processing cost per unit risesd. order-processing cost per unit falls more
rapidlye. order-processing cost per unit falls more
slowly 2. Companies are reducing their inventory
costs by treating inventory items differently, positioning them according to
risk and opportunity. High-risk,
low-opportunity items are known as ________.a. nuisance itemsb. bottleneck itemsc. commoditiesd. critical itemse. containerized items3. ________ consists of putting goods in boxes
or trailers that are easy to transfer between two transportation modes.a. Containerizationb. Private labelingc. Inventory carryingd. Order processinge. Warehousing 4. If the shipper owns its own truck or air
fleet, it becomes a ________.a. containerized carrierb. private carrierc. contract carrierd. common carriere. diversified carrier 5. In deciding on the method or means of
transportation, shippers consider such criteria as speed, frequency, ________,
capability, availability, traceability, and costs. a. air versus ground b. gypsy truckers c. dependability d. branded name truckerse. costs per mile 6. Today customers want more frequent
deliveries, shorter order-cycle times, direct store deliveries, mixed pallets,
tighter promised times, and ________ packaging, price tagging, and display
building. a. colorful b. childproof c. custom d. easy opening e. theftproof 7. Market-logistics strategies must
be derived from ________, rather than solely from cost considerations. a. competitive analysis b. low-cost considerations c. cost strategies d. business strategies e. marketing strategies Answer: d True/False
8. Retailing includes all the activities
involved in selling goods or services directly to final consumers for personal,
nonbusiness use. : 9. Any organization selling to the final
consumers is doing retailing. However, it matters howthe goods or
services are sold and where they are sold. 10. Retailers can position themselves as
offering one of four levels of service.
However, self-selection and self-service are the same in discount
retailers. 11. An off-price
retailer is one in which the retailer has a broad selection of
high-markup, fast-moving, brand-name goods in stock. 12. Full service
retailers have salespeople who are ready to assist the customers in every phase
of their shopping trip. 13. Nonstore
retailinghas not been
growing as fast as traditional store retailing. 14. Corporate retail organizations achieve
economies of scale, greater purchasing power, wider brand recognition, and
better-trained employees. 15. All of the benefits in a franchising system
accrue to the franchisor because the franchisor is able to concentrate the risk
and effort associated with running a store in the hands of the franchisee.16. The two models of the traditional
department stores responses to competition is to develop a store with strong
retail brand approaches and the showcase store. 17. Department stores today are exclusively
worried about competition from other department stores. Other retailing forms are not a threat to
department stores sales and profitability.18. One of the up and coming trends in
retailing is the growth of giant
retailers,knownas category killers and supercenters.
19. Today, growth in the retail market is
centered firmly in the middle market, leaving luxury retailers and discounting
specialists struggling. 20. The retailers product assortment does not
need to match the target markets shopping
expectations. 21. A retailers real challenge begins after
defining the stores product assortment, and that is to develop a
product-differentiation strategy. 22. Retailers are generally eager to
stock new products, making it difficult for manufacturers to keep older, but
proven brands on the shelves.23. Because of the high cost of retail
space, most retailers are highly attuned to which of the products they stock
generate profit.24. Prices are a key positioning
factor to retailers and must be decided in relation to the target market. 25. The amount of time shoppers spend in a
store is perhaps the single most important factor in determining how much they
will buy.26. Paco Underhill
suggests that retailers, to increase sales volume, make their shoppers hunt for
the merchandise. His logic is this: While hunting, the shopper will be
exposed to more and more products, thus the likelihood increases that the
shopper will purchase impulse items, thus increasing their overall purchase
total. 27. One of a retailers most important
decisions is location, location, location.28. There is generally a relationship
between high customer traffic and high rents in choosing a retail location. 29. Private-label merchandise is also
known as store, house, or distributor brands. 30. Retailers develop their own store brands
to differentiate themselves from other retailers and the national branded
merchandise. 31. The lower price of generics is made
possible by lower-quality ingredients, lower-cost labeling and packaging, and
minimal advertising. 32. The growing power of store brands is not
weakening the national brands due to the national brands increases in
advertising and research and development. 33. Wholesaling includes all the
activities involved in selling goods or services to those who buy for resale or
business use. Wholesaling includes manufacturers and farmers who sell directly
to consumers. 34. Wholesaler-distributors have not
faced the pressures in recent years from new sources of competition, demanding
customers, new technologies, or more direct-buying programs. 35. Because wholesalers do not
actually manufacture a product, they are unable to effectively manage asset
productivity.36. Supply chain management starts
when the product comes off the factory floor and enters the
distribution/transportation channels. 37. Market logistics involves 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. 38. Integrated logistics systems involves
materials management, material flow systems, and electronic distribution. 39. Today information systems play a
critical role in managing market logistics, especially computers, satellite
tracking, and electronic funds transfers. 40. Choosing a market-logistics system calls
for examining the total cost (M) associated with different proposed systems and
selecting the system that minimizes it, where T (total freight costs) + FW
(total fixed warehouse cost) + VW (total variable warehouse costs) is expressed
as M = T + FW + VW. 41. One of the four major decisions that must
be made about market logistics is: How much inventory do we keep in the
warehouse? 42. The order-to-payment
cycleis the elapsed time between an orders receipt, delivery, and payment
by the customer. 43. Order-processing costs must be compared
with inventory-carrying costs because as the amount of stock carried
increases, the higher the inventory-carrying costs.44. Inventory costs increases at a decreasing
rate as customer-service levels approach 100% fulfillment. 45. The choice of transportation
methods of distribution have negligible effects on the prices charged for the
product and therefore marketers need not be overly involved in this process. 46. The logistics system must be information
intensive and establish electronic links among all the significant parties.47.
In
shipping goods to its warehouses, dealers, and customers, the company can
choose between five transportation modes: rail, air, truck, waterway, and
pipeline. Essay
101.
The wheel-of-retailing
hypothesis explains one reason that new store types emerge. Explain this
hypothesis and delineate the four service levels available to retailers. 102.
Although
the overwhelming bulk of goods and services are sold through stores, nonstore
retailing has been growing much faster than store retailing. Nonstore
retailing falls into four major categories. List and briefly define each
category.

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