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37) ________ serve bulk industries such as coal, lumber, and heavy equipment, assuming title
and risk from the time an order is accepted to its delivery.
A) Producers' cooperatives
B) Cash and carry wholesalers
C) Truck wholesalers
D) Drop shippers
E) Rack jobbers
38) ________ sell and deliver a limited line of semiperishable goods to supermarkets, grocery
stores, hospitals, restaurants, and hotels.
A) Producers' cooperatives
B) Cash and carry wholesalers
C) Truck wholesalers
D) Drop shippers
E) Rack jobbers
39) Agricultural assemblers, petroleum bulk plants and terminals, and auction companies are
examples of ________.
A) full-service wholesalers
B) specialized wholesalers
C) limited-service wholesalers
D) merchant wholesalers
E) brokers
40) Which of the following is true of brokers?
A) Brokers represent buyers or sellers on a semipermanent basis.
B) Most brokers are small businesses with a few skilled salespeople.
C) Brokers bring buyers and sellers together and assist in negotiation.
D) Selling brokers have contractual authority to sell a manufacturer's entire output.
E) Purchasing brokers make purchases for buyers and often receive, inspect, warehouse, and ship
merchandise.
41) ________ refers to buying large carload lots and dividing them into smaller units before
shipping them out to consumers.
A) Bulk breaking
B) Containerization
C) Wholesaling
D) Warehousing
E) Broking
42) The elapsed time between an order's receipt, delivery, and payment is called the ________.
A) variable-costs-to-payment cycle
B) product-to-payment cycle
C) inventory-to-sale cycle
D) order-to-inventory cycle
E) order-to-payment cycle
43) ________ costs for a manufacturer consist of setup costs and running costs.
A) Inventory-carrying
B) Containerization
C) Wholesaling
D) Order-processing
E) Transportation
44) As inventory draws down, management must know at what stock level to request additional
stock. This stock level is called the ________.
A) reorder point
B) least fixed point
C) point of divergence
D) inflection point
E) critical point
45) A stock order point of 10 means ordering the product ________.
A) every 10 days
B) when stock falls to 10 units
C) every 10 units
D) when stock falls to 9 units
E) in batches of 10 items
46) E&OE is trying to minimize its inventory costs, which are extremely high. The company has
realized that it can achieve this by maintaining a near-zero inventory and producing more only
once a product is ordered. Which of the following is true for E&OE?
A) Inventory costs are lower than order-processing costs.
B) Running costs are higher than inventory-carrying costs.
C) Setup costs for the products are low.
D) Order-processing costs are high.
E) Order-processing costs are lower than setup costs.
47) E&OE is trying to minimize its inventory costs, which are extremely high. The company has
realized that it can achieve this by maintaining a near-zero inventory and producing only once a
product is ordered. Which of the following will be true for E&OE?
A) Short production runs will be more expensive than longer ones.
B) Setup and order-processing costs will be high.
C) The order point will be high.
D) Order-processing costs will be lower than the inventory-carrying costs.
E) E&OE can reduce the average cost per unit by producing a long run.
48) 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 increases
D) order-processing cost per unit increases though inventory cost decreases
E) inventory-processing cost per unit falls slowly
49) 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) variable items
D) critical items
E) commodities
50) HCN recently introduced a product that the distributor considers a "bottleneck" item. What is
the risk/opportunity relationship for bottleneck items?
A) low risk, mediocre opportunity
B) low risk, high opportunity
C) low risk, low opportunity
D) high risk, mediocre opportunity
E) high risk, low opportunity
51) An item described as low-risk and low-opportunity is a ________.
A) nuisance item
B) bottleneck item
C) variable item
D) critical item
E) commodities
52) ________ consists of putting goods in boxes or trailers that are easy to transfer between two
transportation modes.
A) Containerization
B) Haulage
C) Inventory carrying
D) Order processing
E) Warehousing
53) Which of the following is an example of a private carrier?
A) MET is a transporter that operates only in the Chicago area and charges fixed prices.
B) BCL is a family firm that owns only three trucks, but takes small orders for transport.
C) VTV owns a fleet of trucks and transports goods for any client for a fee.
D) COM is a shipping firm that transports goods by road and rail across the U.S.
E) BEL Inc. manufactures parts for automobiles and transports its products to customers itself.
54) The trucking firm hired by your transportation manager provides a trucking service between
the city of Sacramento and the surrounding towns on a regular schedule and at fixed prices. The
trucking firm saves transportation costs by transporting the goods using trains as well as trucks,
instead of trucks alone. Your transportation manager has hired a(n) ________.
A) airship carrier
B) airtruck carrier
C) trainship carrier
D) fishyback carrier
E) piggyback carrier
55) 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
56) Retailing includes all the activities involved in selling goods or services directly to final
consumers.
57) Full-service retailers generally have the lowest costs of all retail types.
58) Discount stores usually stock leftover goods, overruns, and irregular merchandise, sold at
less than retail.
59) A superstore is a storeless retailer serving a specific clientele who are entitled to buy from a
list of retailers that have agreed to give discounts in return for membership.
60) "Pop-up" stores let retailers promote brands to seasonal shoppers for a limited time.
61) Department stores only face competition from other department stores as other retailing
forms are not a threat to their sales and profitability.
62) Firms are increasingly recognizing the importance of influencing consumers at the point of
purchase.
63) Retailers can target their customers more effectively by using only a single channel to reach
them.
64) Featuring exclusive national brands that are not available at competing retailers is a way of
generating consumer interest in a retailer.
65) The gross margin on a product bears a direct relation to the direct product profit.
66) Some high-volume products may have such high handling costs that they are less profitable
and deserve less shelf space than low-volume products.
67) Low prices on some items serve as traffic builders or loss leaders for retailers.
68) Postpurchase services include shipping and delivery, gift wrapping, adjustments and returns.
69) Private label or store brands are also known as generics.
70) The lower price of generics is made possible by lower-cost labeling and packaging and
minimal advertising, and sometimes lower-quality ingredients.
71) Wholesaling includes all the activities in selling goods or services to those who buy for
resale or
business use.
72) Most companies today are trying to increase the order-to-payment cycle.
73) More stocking locations mean goods can be delivered to customers more quickly, and
warehousing and inventory costs are lower.
74) Inventory cost increases at an accelerating rate as the customer-service level approaches 100
percent.
75) The order-processing cost per unit increases with the number of units ordered because the
order costs are spread over more units.
76) List and explain the four service levels offered by retailers.
77) Differentiate between brokers and agents.
78) Imagine that you are in charge of creating a distinctive store atmosphere at a clothing
retailer. What can you do to make your store stand out in the customer experience?
79) Reynold's, a supermarket chain, carries the K-Nine range of dog food manufactured by JGB.
However, the chain does not interact directly with JGB, but obtains stocks from wholesalers. It
has been suggested that Reynold's save costs by sourcing products directly from JGB. However,
Mal, the CEO of the Reynold's, insists that wholesalers are the most hassle-free option for
Reynold's. What can Mal say to justify this?
80) E&OE is looking to reduce its inventory costs for all its products. The company realizes that
its inventory depends on the setup costs of its various products. How do setup costs affect
E&OE's inventory costs?
