120) ________ 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
121) Wholesaling includes all the activities in selling goods or services to those who buy for
resale or business use.
122) Wholesalers exclude manufacturers and farmers because they are engaged primarily in
production, but include retailers, as they are selling to the end consumer.
123) Merchant wholesalers are independently owned businesses that take title to the merchandise
they handle.
124) Why do retailers prefer to deal with wholesalers rather than directly with manufacturers?
125) JGB manufactures the K-Nine brand of dog food that is carried in supermarkets across the
country. The company has always used wholesalers instead of selling directly to the retailers.
However, recently, the sales team at JGB has noticed that wholesalers don’t aggressively
promote JGB’s product line. They often don’t carry enough inventory and therefore don’t fill
customers’ orders fast enough. However, the marketing team insists that the wholesaling route is
the best. What reasons can the marketing team offer to justify this?
126) 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 Reynold’s, insists that wholesalers are the most hassle-free
option for Reynold’s. What can Mal say to justify this?
127) How would a merchant wholesaler operate?
128) Jayne runs a small grocery store in a small town. As there are only a few customers, the
store does not require to stock goods in large quantities. Explain why sourcing products from a
wholesaler will be beneficial for Jayne.
129) ShoeZone is a shoe retailer with outlets across the country. The company is trying to reduce
its inventory and warehousing costs, but needs to keep delivery speeds as short as possible. What
can ShoeZone do to achieve this?
130) ________ encompass sales forecasting, production planning, and inbound materials
transportation.
A) Market logistics
B) Containerization
C) Transportation
D) Nonstore retailing
E) Wholesaling
131) The elapsed time between an order’s receipt, delivery, and payment is called the ________
cycle.
A) variable-costs-to-payment
B) product-to-payment
C) inventory-to-sale
D) order-to-inventory
E) order-to-payment
132) ________ costs for a manufacturer consist of setup costs and running costs.
A) Inventory-carrying
B) Containerization
C) Wholesaling
D) Order-processing
E) Transportation
133) ________ was originally pioneered by Japanese firms such as Toyota to produce goods
with minimal waste of time, materials, and money.
A) Electronic funds transfer (EFT)
B) Market logistics
C) Electronic data interchange (EDI)
D) Lean manufacturing
E) Supply chain management
134) 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
135) 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
136) Optimal order quantities exist when the curves for the order-processing cost per unit and
inventory-carrying cost per unit ________.
A) are collinear
B) are diagonal to each other
C) intersect
D) are parallel to each other
E) equal zero
137) 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
products only once it 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.
138) 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
products only once it 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.
139) 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
140) An item described as low-risk and low-opportunity is a ________.
A) nuisance item
B) bottleneck item
C) variable item
D) critical item
E) commodity
141) ________ 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
142) 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 United States.
E) BEL Inc. manufactures parts for automobiles and transports its products to customers itself.
143) 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) ________ carrier.
A) airship
B) airtruck
C) trainship
D) fishyback
E) piggyback
144) If the shipper owns its own truck or air fleet, it becomes a ________ carrier.
A) containerized
B) private
C) contract
D) common
E) diversified
145) Most companies today are trying to increase the order-to-payment cycle.
146) More stocking locations mean goods can be delivered to customers more quickly, and
warehousing and inventory costs are lower.
147) Inventory cost increases at an accelerating rate as the customer-service level approaches
100 percent.
148) If setup costs are high, the manufacturer can produce the item often, and the average cost
per item is stable and equal to the running costs.
149) Order-processing costs must be compared with inventory-carrying costs because the larger
the average stock carried, the higher the inventory-carrying costs.
150) As inventory draws down, management must know at what stock level to place a new order.
This stock level is called the order point.
151) The order-processing cost per unit increases with the number of units ordered because the
order costs are spread over more units.
152) Companies who want to carry near-zero inventory should build for order, not for stock.
153) Describe the four steps in market logistics planning.
154) E&OE wants to minimize inventory costs as far as possible. Explain one way by which it
can achieve a near-zero inventory.
155) What is the role of information technology in the logistics system?
156) Why are marketers concerned about the cost of logistics?