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Chapter 13—Logistics and Channel Management
MULTIPLE CHOICE
1. Which is a true statement about why Zara, the Spanish fashion apparel specialty chain, is so
successful?
a.
Most of Zara’s merchandise is produced in Asian factories to save production
costs.
b.
Because of Zara’s efficient logistics system, it can bring designs from the sketch
pad to the store in two weeks.
c.
It uses coordinated promotions to work with retailers.
d.
Operational efficiencies.
e.
It was purchased and managed by GAP.
2. Physical logistics and distribution are considered to be __________ terms.
a.
opposite
b.
contradictory
c.
complementary
d.
symmetrical
e.
synonymous
3. Supply chain management refers to:
a.
Another name for logistics.
b.
Another name for physical distribution.
c.
Transportation, storage, warehousing and order processing.
d.
Logistical systems that emphasize close cooperation and comprehensive
interorganizational management.
e.
Controlling suppliers who provide inputs and materials to the company.
4. In contrast to traditional logistics, supply chain management tends to emphasize:
a.
Short-term relationships.
b.
Transaction-based planning.
c.
Little risk sharing.
d.
Independent efforts.
e.
Channel-wide cost efficiencies.
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5. Which of the following is not characteristic of a supply chain management approach to
logistics management?
a.
Long-term relationships
b.
Coordinated and focused leadership
c.
Independent effort to manage inventory
d.
Risks and rewards shared over long-term
e.
Joint reduction on channel inventories
6. Firms that specialize in performing most or all of the logistical tasks which manufacturers or
other channel members would normally perform themselves are often referred to as:
a.
Third party logistics providers.
b.
MRO firms.
c.
Supplier chains.
d.
Supply chain management analysts.
e.
Distribution contractors.
7. In the food industry, the process of seeking to provide consumers with better service and more
value through cooperation in the supply chain is usually referred to as:
a.
Efficient congestion.
b.
Efficient consumer response.
c.
Supply chain management.
d.
Electronic consumer response.
e.
Expert service.
8. Moving merchandise immediately from the receiving area in the warehouse directly to trucks
for shipment to stores without storing the merchandise in the warehouse is referred to as:
a.
Immediate transfer.
b.
Non-storage shipping.
c.
Cross-referencing of inventory.
d.
ECR.
e.
Cross-docking.
Marketing Channels 8e
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9. Logistics involves planning, implementing, and controlling the __________ of materials and
final goods from points of origin to points of use to meet __________ at a __________.
a.
transportation; inventory requirements; low cost
b.
physical flows; customers needs; profit
c.
inventory; order specifications; defined cost
d.
shipment; inventory levels; profit
e.
movement; production requirements; high level of efficiency
10. The modern view of logistics is that:
a.
The major emphasis should be placed on effective and efficient transportation.
b.
The various activities involved should be managed as an integrated system.
c.
Channel decisions and logistics decisions are the same.
d.
It is the most important component of the marketing mix.
e.
Just-in–time inventory resolves logistics problems.
11. All of the following are true statements about logistics except:
a.
It is a key factor for a firm’s competitive advantage.
b.
It is a key factor for providing high levels of customer service.
c.
It is a key factor in a firm’s expenses.
d.
It is managed by the Vice President of Supply Chain Management.
e.
It is key to actually making products available to customers.
12. The systems approach to logistics:
a.
Recognizes the need for a common computer system linking logistics processes.
b.
Notes the interrelationships among the logistics processes.
c.
Utilizes a specialized cost accounting system to control the costs of logistic
processes.
d.
Requires careful analysis of transportation channel managers.
e.
Requires a specialized software developed by Supply Chain Software Co.
13. An approach that takes note of the various factors involved in the logistical process and the
interrelationships among them is referred to as:
a.
The systems concept.
b.
The logistical concept.
c.
The marketing concept.
d.
A logistics mechanism.
e.
Systems analysis.
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14. A logistics manager seeking to minimize the cost of all logistic processes taken together,
rather than reduce the cost of individual components of the logistics system, is using:
a.
A marginal cost approach.
b.
A total profit approach to logistics systems.
c.
The logistic costing approach.
d.
The total cost approach.
e.
A profit center approach to the logistics functions.
15. The channel manager’s role in the firm’s logistics strategy:
a.
Is one of designing the logistics system.
b.
Involves managing the logistics system once it has been designed.
c.
Should be strictly constrained.
d.
Should be one of attempting to influence logistics strategy so as to promote
channel member cooperation.
e.
Uses power to alter channel members’ logistics systems.
16. Which of the following is not considered a logistics channel management interface?
a.
Defining what kinds of service standards channel members want
b.
Making sure that a proposed logistics program meets channel member service
standards
c.
Selling the channel members on the logistics program
d.
Monitoring the results of a logistics program once that program is in place
e.
Analyzing the costs of the logistics program
17. All of the following are components of a logistics system except:
a.
Materials handling.
b.
Packaging.
c.
Order processing.
d.
Inventory control.
e.
New product training.
18. All of the following are components of a logistics system except:
a.
Warehousing.
b.
Packaging.
c.
Order processing.
d.
Merchandising.
e.
Materials handling.
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19. Which of the following is not an issue to consider in deciding on a mode of transportation?
a.
Should the firm use its own carriers or common carriers?
b.
What are the different rates available?
c.
What specific transportation services are offered?
d.
What modes of transportation are competitors using?
e.
What mode is the least expensive?
20. Which of the following is not within the province of the materials handling function?
a.
The kinds of forklifts and cranes that should be used within a warehouse
b.
The use of employees in the receiving and shipping departments
c.
Minimizing the distance products are moved within a warehouse
d.
Setting up supplies or inputs in the factory
e.
What kinds of conveyor belts should be used in the warehouse
21. Susan Baime works for Judge Manufacturing, Inc. and is in charge of the placement and
movement of products within Judge’s storage areas. Susan works in:
a.
Warehousing.
b.
Order processing.
c.
Facilities management.
d.
Materials handling.
e.
Transportation.
22. The process when products are moved from the arriving truck and immediately loaded onto
other trucks for delivery to stores is called:
a.
Pass through shipping.
b.
Cross-docking.
c.
Just in time delivery.
d.
Efficient transportation.
e.
Non-warehousing.
23. The time between when an order is placed and when it is received is known as:
a.
Order system time.
b.
Order service time.
c.
Order receipt time.
d.
Orders return time.
e.
Order cycle time.
Logistics and Channel Management
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24. In order to provide quick and efficient order processing, W. W. Grainger Inc.,
a.
Has hired an expert logistics and channel manager.
b.
Has a fully trained staff of order processors.
c.
Has developed a satellite communications system linking distributors and
customers.
d.
Has hired experts to develop a proprietary communications software to link all
members of the logistics process.
e.
Replaces computer hardware every year.
25. Average ordering costs tend to decrease in rough proportion to the:
a.
Size of the order.
b.
Distance from buyer to seller.
c.
Number of orders.
d.
Level of the inventory.
e.
Cost per unit.
26. The point where inventory carrying costs plus ordering costs are lowest is called the:
a.
Lowest ordering point.
b.
Total cost point.
c.
Economic order quantity.
d.
Marginal cost level.
e.
Optimal order level.
27. Average inventory carrying costs tend to rise in __________ to the level of the inventory.
a.
indirect proportion
b.
inverse proportion
c.
direct proportion
d.
exponentially
e.
marginal proportion
28. Inventory carrying costs consist of all of the following except:
a.
Financing costs.
b.
Packaging costs.
c.
Storage costs.
d.
Inventory shrinkage charges.
e.
Insurance charges.
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29. _________ is often considered the most complex component of the logistics system.
a.
Packaging
b.
Warehousing
c.
Materials handling
d.
Inventory control
e.
Order processing
30. Which of the following would not typically be considered a decision associated with
warehousing?
a.
Location of warehouse
b.
Number of warehouse units
c.
Size of the warehouse
d.
Design of the warehouse
e.
The manager and staff
31. The growth of “eaches” and “onesie” transactions is being fostered by the growth of:
a.
Supply chain management.
b.
ECR.
c.
Large warehouses.
d.
The Internet.
e.
Massive inventory shipments.
32. Which of the following is a false statement about how Internet shopping will affect
warehousing?
a.
There will be a decreased need for warehouses.
b.
Many Internet retailers are storefronts with no need for warehouses.
c.
It is easy to have excess capacity if online sales do not grow according to
projections.
d.
Internet providers need numerous, well-located, and efficient warehouses.
e.
Third parties will provide warehousing needs for many Internet companies.
33. Packaging costs are typically __________ for airfreight than for truck freight.
a.
higher
b.
lower
c.
about the same
d.
much higher
e.
a little higher
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34. Which of the following statements regarding packaging is true?
a.
The type of transportation used affects packaging costs.
b.
Packaging does not affect warehouse costs.
c.
Packaging does not increase inventory carrying costs.
d.
Packaging does not affect the efficiencies of the logistics system.
e.
Distinctive packaging improves customer sales.
35. Which of the following statements regarding packaging is false?
a.
The type of transportation used affects packaging costs.
b.
Packaging affects warehouse costs.
c.
Packaging affects inventory carrying costs.
d.
Packing does not affect the order processing component.
e.
Packaging can reduce product damage.
36. A well-designed and responsive logistics program should result in:
a.
Shortened order cycle times.
b.
Higher inventories for channel members.
c.
More use of airfreight.
d.
Larger warehouses.
e.
More customers.
37. Which of the following would not normally be considered as a logistics service standard?
a.
Order size
b.
Percentage of orders filled accurately
c.
Percentage of orders filled
d.
Liberal returns and allowances
e.
Percentage of items out of stock
38. In general, the higher the service standards the manufacturer offers:
a.
The higher the costs.
b.
The more products are shipped.
c.
The more elaborate the information flow must be.
d.
The faster the transport mode must be.
e.
The more efficient the warehousing must be.
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39. The key elements of customer service described by LaLonde include all of the following
except:
a.
Product availability.
b.
Packaging options available.
c.
Order cycle time.
d.
Post-sale product support.
e.
Distribution system information.
40. Which of the following is not one of the Basic Service Capabilities defined by Bowersox and
Closs?
a.
Capacity to have inventory when it is desired by customers
b.
Ability to meet the levels of planned inventory availability
c.
Accuracy in fulfilling customer orders
d.
Expected performance of the logistics systems
e.
The ability to comply with the levels of planned inventory performance
41. The services by which logistics performance is measured are known as:
a.
Logistic systems costs services.
b.
Systems standards.
c.
Service standards.
d.
Order size and assortment constraint services.
e.
Percentage of orders filled services.
42. The particular logistics service standards desired by channel members:
a.
Are a positive function of channel member size.
b.
Vary widely for different channel members.
c.
Are virtually the same for most channel members.
d.
Are usually far beyond the capacity of the manufacturer to meet.
e.
Cannot be defined in quantitative terms.
43. “The right amount of the right product, in the right place, at the right time and in the right
condition” is incomplete; it also is essential to consider:
a.
The right levels of service.
b.
The right packages.
c.
The right managers.
d.
The right price.
e.
The right size.
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44. In defining logistics service standards, the channel manager can use survey research to find
out all of the following except:
a.
Whether channel members would be willing to pay for improved logistics service.
b.
What kinds of service standards channel members are seeking.
c.
Information about the service levels of competitors.
d.
What goals and objectives are appropriate for the firm and channel members.
e.
Identifying areas where logistics can be used to gain a competitive advantage.
45. To learn about channel members’ logistics service demands, a channel manager can find all of
the following methods helpful except:
a.
Use discrete survey research.
b.
Present them with alternatives and evaluate their cost-service tradeoffs.
c.
Use his/her standard research.
d.
Channel audits.
e.
Board of directors feedback.
46. Recent studies of physical distribution service quality (PDSQ) have shown that ___________
significantly influences purchasing managers’ perceptions of the quality of logistical service.
a.
friendliness and timeliness
b.
speed of order processing
c.
timeliness, availability, and condition
d.
quality of the sales force
e.
packaging, cost, and location of the product
47. An evaluation of whether a proposed logistics program meets the channel members’ service
standards requires that the channel manager:
a.
Have a clear understanding of the objectives of the proposed logistics service
program.
b.
Be an expert in the area of logistics.
c.
Be intimately involved in the technical aspects of the design of the logistics
program.
d.
Be able to develop and analyze a good survey.
e.
Understand the service needs of channel members.
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48. Which of the following is not usually recommended as a broad-based appeal to be used for
convincing channel members of the value of a proposed logistics program?
a.
A reduction in out-of-stock occurrences that the logistics program might foster
b.
A reduction in channel member inventories that the logistics program might bring
about
c.
The added manufacturer support that the logistics program might foster
d.
The increase in the channel members’ sales that a good logistics program can
virtually guarantee
e.
Identify the benefits to the customer and channel member
49. EDI systems can perform all of the following except:
a.
Transfer orders and confirmations between the manufacturer’s and the channel
members’ computers.
b.
Provide information on new products, price changes and promotional programs.
c.
Issue bills of lading.
d.
Issue invoices.
e.
Send notices that the payment is late.
50. Just-in-time inventory systems:
a.
Are useful in manufacturing but not in channels of distribution.
b.
Can be successful without supplier cooperation.
c.
Can reduce inventory costs substantially.
d.
Were developed by the American automotive industry.
e.
Increases warehousing costs.
51. The Great Physical Distribution Management Paradox rule indicates that for any given
distribution strategy that is carefully thought out, accepted, implemented, and maintained, it:
a.
Results in a well designed logistics system.
b.
Will be inappropriate in five years.
c.
Will be an excellent system for the long term.
d.
Will still not meet channel members needs or expectations.
e.
Will not be able to improve efficiencies.
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52. According to the text, one of the most effective ways of monitoring the results experienced by
channel members in the use of a logistics program is:
a.
To use the grapevine.
b.
To rely solely on the sales force.
c.
To conduct a survey of a sample of channel members.
d.
To perform a sales analysis.
e.
Analyze orders that are placed by channel members.
53. Research shows that conducting surveys to uncover channel members’ satisfaction with the
firm’s logistics system can be opening a Pandora’s box because:
a.
Once channel members begin reproaching the manufacturer, it is very difficult to
get them to stop.
b.
Channel member satisfaction decreases if the manufacturer takes no action to
remedy reported deficiencies.
c.
Logistics systems are too complex to be delved into with surveys.
d.
Channels members do not answer and return surveys.
e.
The answers reported on surveys do not reflect actual satisfaction levels.
54. The principle of having just enough inventory on hand to meet immediate production needs
with no reserve stock is called:
a.
The no-inventory system.
b.
Physical distribution quality system.
c.
The onesie transaction system.
d.
Just-in–time system.
e.
No stock-out system.