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e.
Order receipt, order checking, order delivery
117. Walgreen’s drug stores prefer to receive refills of prescriptions through a phone-based system where customers can
directly key in the information about the drug. By receiving orders in this manner rather than through a paper-based
system or by a phone conversation with a pharmacy employee, Walgreen’s has been able to save time and money on
a.
electronic data interchange.
b.
order entry.
c.
inventory management.
d.
order delivery.
e.
materials handling.
118. The order-processing task that involves verifying product availability, checking prices and customer credit ratings,
and filling orders is
a.
warehousing.
b.
order handling.
c.
information processing.
d.
materials handling.
e.
order entry.
119. Order handling involves all of the following activities except that the
a.
credit department approves the purchase.
b.
order is transmitted to the warehouse.
c.
availability of product is verified.
d.
warehouse is instructed to fill the order.
e.
customer places a purchase order.
120. A commonly used computerized means of integrating order processing with production, inventory, accounting, and
transportation is
a.
web-based inventory management.
b.
just-in-time.
c.
electronic data interchange.
d.
universal product codes.
e.
activity based management.
121. Nathan is trying to decide which shipping company to use to transport his custom-made furniture to customers.
Nathan is facing a decision about
a.
order entry.
b.
order completion.
c.
just-in-time.
d.
order handling.
e.
order delivery.
122. Because of the significant investment many companies have in the products they sell to customers, they must
develop and maintain adequate varieties of products to meet their customers' needs. This is called
a.
just-in-time.
b.
order processing.
c.
inventory management.
d.
merchandise stocking.
e.
logistical management.
123. Greg is a physical distribution manager. He is currently developing and maintaining assortments of products that are
adequate for customer demand. In which stage in the physical distribution system is Greg currently involved?
a.
Order processing
b.
Materials handling
c.
Inventory management
d.
Transportation
e.
Warehousing
124. The result of an inventory stockout usually results in ___.
a.
an increase in inventory costs.
b.
an increase in lost sales.
c.
an increase in net profit.
d.
an increase in loyal customers.
e.
a decrease in prices.
125. Anya, sales manager for Pacific Lumber, tells Ricardo, the firm's inventory manager, that the firm's failure to have
adequate supplies of pressure-treated lumber on hand has cost the firm $175,000 in lost sales. This figure represents which
of the following inventory management costs?
a.
Carrying
b.
Replenishment
c.
Stockout
d.
Safety stock
e.
Reorder
126. What is the reorder point if the usage rate is 10 units per day, the order lead time is five days, and the safety stock is
30?
a.
50
b.
150
c.
80
d.
200
e.
400
127. A manufacturer has decided to improve its inventory management by maintaining low inventory levels and waiting
to purchase materials until right before they are needed in production. This inventory management technique is called
a.
just-in-time (JIT).
b.
time management.
c.
inventory minimization.
d.
economic order quantity.
e.
reorder point maximization.
128. Eric is concerned about not having enough air conditioning units in inventory during June, July, and August so he
keeps extra inventory to guard against stockouts during this critical period. Eric is keeping
a.
short order lead times.
b.
just-in-time inventory.
c.
a controlled usage rate.
d.
safety stock.
e.
excessive inventory.
129. All of the following are concepts used in a just-in-time inventory management system except
a.
supplies arrive just as they are needed.
b.
safety stock is kept to reduce stockouts.
c.
much waste is eliminated.
d.
purchases are made in small quantities.
e.
purchases are made frequently.
130. Aaron attends a seminar on just-in-time inventory management. Excited about the idea, he returns to his office at
Atlanta Auto Supply to start designing such an inventory system. Which of the following steps must Aaron take as he
institutes this change?
a.
Increase safety stock
b.
Raise the reorder point
c.
Reduce customer service standard
d.
Increase order frequency
e.
Reduce estimates of inventory turnover rate
131. What is the primary determinant in deciding how materials will be handled?
a.
Unit loading
b.
Containerization
c.
Customer preference
d.
Cost reduction
e.
Product characteristics
132. Johnson Controls hires a consultant to assess its materials handling procedures. The consultant recommends the
implementation of ____ if they want easier movement of items between internal destinations in the warehouse.
a.
unit loading
b.
piggybacking
c.
containerization
d.
inventory management
e.
priority transportation
133. Kawasaki places several motorcycles in “pods” in order to load them efficiently using forklifts. This system of
materials handling is called
a.
warehousing.
b.
containerization.
c.
group storage.
d.
unit loading.
e.
mechanized handling.
134. Fansteel manufactures parts used in jet engines, which it sells to companies such as Boeing. When shipping products
to Boeing, Fansteel seals the parts in 8' × 8' × 40' boxes for shipping to decrease loss and damage. This method of
materials handling is
a.
unit loading.
b.
containerization.
c.
freight forwarding.
d.
unitized shipping.
e.
bonded packaging.
135. Managers and consultants at Colgate-Palmolive are meeting to discuss better ways to package its products to reduce
damage and make loading more efficient. The primary function they are trying to improve is
a.
warehousing.
b.
inventory management.
c.
materials handling.
d.
cycle time.
e.
containerization.
136. Which of the following physical distribution functions involves design and operation of facilities for storing goods?
a.
Order processing
b.
Materials handling
c.
Transportation
d.
Warehousing
e.
Inventory management
137. What function of physical distribution enables companies to compensate for dissimilar production and consumption
rates and stabilize prices and availability of seasonal items?
a.
Materials handling
b.
Warehousing
c.
Transportation
d.
Inventory management
e.
Order processing
138. Morgan Steel Company leases a warehouse in Jacksonville, Alabama to serve Deep South markets that were large
enough and stable enough to make a long-term commitment to fixed facilities. This is a
a.
flexible warehouse.
b.
dispatching center.
c.
distribution center.
d.
private warehouse.
e.
public warehouse.
139. ClearChem is a producer of chemicals used in car detailing and painting. Because of the volatility of their chemical
products when exposed to dirt and heat, ClearChem operates its own facilities for storing and shipping its products.
ClearChem’s facilities are most likely known as
a.
distribution centers.
b.
product storehouses.
c.
public warehouses.
d.
megawarehouses.
e.
private warehouses.
140. Air-Tech management learns that last month's production run of heaters at its Newark plant is defective and
announces a recall of the specific models produced. To handle the large number of products it expects to receive for
replacement of the defective thermostats, Air-Tech will probably need to add a ____ to its distribution network.
a.
distribution center
b.
private warehouse
c.
dispatching shipment system
d.
public warehouse
e.
materials handling system
141. A public warehouse is a
a.
business that leases storage space and related facilities for distribution to other firms.
b.
large, centralized warehouse that focuses on moving rather than storing goods.
c.
company that provides a complete array of logistical services for businesses.
d.
company-operated facility for storing and shipping products.
e.
warehouse used to store the personal property of many different customers.
142. Garcia Wholesale Plumbing has seen its sales in the Southeast triple in the past two years. Materials handling
director Barb Peterson announces plans to the board for an Atlanta facility that will combine shipments received from
Garcia's 25 suppliers for nearly immediate shipment to plumbing stores and contractors in the region. This new facility
would be best classified as which of the following?
a.
Sales office
b.
Public warehouse
c.
Field public warehouse
d.
Distribution center
e.
Bonded warehouse
143. WTA is a manufacturer of very large blades used in energy-reducing wind turbines. What is most likely the most
expensive physical distribution function associated with the WTA product?
a.
Warehousing of the product.
b.
Order processing for each blade.
c.
Inventory management of the product.
d.
Transportation of the product.
e.
Materials handling of the product.
144. ____ adds time and place utility to a product by moving it from where it is made to where it is purchased and used.
a.
Warehousing
b.
Containerization
c.
Distribution
d.
Materials handling
e.
Transportation
145. Madison is responsible for the freight transportation of products sold by Richland Tech, a producer of cooking oils
sold to large institutions. Since Madison needs to schedule freight transportation with the mode that provides the most
flexible schedules and routes, which of the following should she use?
a.
Trucks
b.
Waterways
c.
Warehousing
d.
Pipelines
e.
Railroads
146. Which mode of transportation hauls more freight than any other?
a.
Railroads
b.
Waterways
c.
Pipelines
d.
Trucks
e.
Airways
147. Magnetic Springs wants to ship its bottled water with the most flexible schedules and routes of all transportation
modes. Magnetic Springs should use ____ as its transportation mode.
a.
railroads
b.
waterways
c.
pipelines
d.
trucks
e.
airways
148. If a microchip in a computer at the Pentagon failed, which method of transportation would be most appropriate to use
to replace the chip immediately if one could get the new chip only from New York City?
a.
Government vehicle
b.
Airway
c.
Waterway
d.
Truck
e.
Railroad
149. Kolder Inc. is using a new just-in-time inventory management system that requires ordering smaller quantities of
parts more frequently. The success of its business depends significantly on receiving these parts very quickly, so like
many other companies using just-in-time, Kolder Inc. is relying more on the ____ mode of transportation despite its
expense.
a.
railroad
b.
pipeline
c.
airway
d.
truck
e.
waterway
150. The Diamond Salt Company needs to transport 20 tons of salt from Baton Rouge, Louisiana, to Cincinnati, Ohio.
Which of the following methods would be the cheapest for transporting this cargo?
a.
Pipelines
b.
Waterways
c.
Trucks
d.
Airways
e.
Railroads
151. Assuming everything else equal, the most cost-efficient way for British Petroleum to transport crude oil from remote
oil drilling sites in central Alaska to shipping terminals on the Alaskan coast would be
a.
waterways.
b.
intermodal transportation.
c.
tanker trucks.
d.
railroads.
e.
pipelines.
152. Luke is a transportation coordinator for Volkswagen of North America. In order to move a large order of vehicles
from a plant in Germany to Chicago, he is planning to use both waterways and railroads. The combining and coordinating
of these two modes of transportation in order to take advantage of benefits offered by each of the different types of
carriers is called
a.
Intermodal transportation.
b.
Transportation piggybacking.
c.
Containerized movement.
d.
Efficiency transportation
e.
Freight forwarding.
153. Piggyback, fishyback, and birdyback are terms usually associated with gaining efficiency in shipping through
a.
transit time.
b.
warehousing.
c.
packaging.
d.
containerization.
e.
lot sizes.
154. What two modes of transportation are used when containers are shipped by piggyback?
a.
Railroads and airways
b.
Trucks and airways
c.
Pipelines and trucks
d.
Waterways and railroads
e.
Railroads and trucks
155. Logistics Plus is an organization that consolidates shipments from several industrial firms into more efficient lot
sizes so that they can be more efficiently transported. What type of transportation company is Logistics Plus?
a.
A freight forwarder
b.
A forwarding agency
c.
A transport consolidator
d.
A specialty transportation company
e.
An Intermodal shipping company
156. Freight transportation companies that offer several different shipment methods are called
a.
megacarriers.
b.
intermodal transporters.
c.
freight forwarders.
d.
shipping experts.
e.
superfreighters.
157. Using a freight forwarder usually
a.
is not economical for a small firm.
b.
increases transit time and shipping costs.
c.
increases transit time and sometimes lowers shipping costs.
d.
lowers shipping costs for a large firm.
e.
reduces transit time.
158. Dual distribution is characterized as
a.
illegal under the Robinson-Patman Act.
b.
distribution channels that typically carry exclusive products, such as Rolex watches.
c.
marketing environments that are highly competitive.
d.
manufacturers that forbid an intermediary to carry products of competing producers.
e.
distribution of one manufacturer's product through two or more different channel structures.
159. In which of the following situations is dual distribution likely to be determined illegal?
a.
A manufacturer sells its product online and through independent and company-owned retail outlets.
b.
A manufacturer opens its own retail outlets across the country and sells its entire line of products.
c.
A producer uses company outlets to dominate independent retailers that carry its products.
d.
A producer sells its products both to wholesalers who deal with small and medium-sized retailers and directly
to retailers.
e.
A producer charges higher prices at its company-owned retail outlets than independent retailers charge for the
same products.
160. Subway sells its food items through company-owned stores and through franchises. Subway uses ____ as a channel
strategy.
a.
channel extension
b.
intermediary exclusion
c.
broker utilization
d.
dual distribution
e.
channel diversification
161. The main reason a manufacturer will prohibit intermediaries from selling its products outside designated sales
territories is to
a.
tighten its control over distribution of its products.
b.
discourage competition from other manufacturers.
c.
incorporate selective distribution.
d.
contain distribution costs.
e.
punish intermediaries for past behavior.
162. Tying agreements occur when a
a.
producer distributes the same product through two or more different channels.
b.
manufacturer forbids an intermediary to carry products of competing manufacturers.
c.
supplier furnishes a product to a channel member with the stipulation that the channel member must purchase
other products as well.
d.
producer refuses to deal to channel members that seem unethical or illegitimate.
e.
manufacturer prohibits intermediaries from selling its products outside designated sales territories.
163. An arrangement where a producer forbids an intermediary to carry products made by competing manufacturers is
called
a.
exclusive distribution.
b.
a tying agreement.
c.
refusal to deal.
d.
contractual VMS.
e.
exclusive dealing.
164. Dell Computers is a nationally recognized manufacturer of computers for the small business and home markets. If
Dell were to order one of its wholesalers not to carry any computer products other than those made by Dell, this
arrangement would be called
a.
a tying contract.
b.
refusal to deal.
c.
a restricted sales territory.
d.
a restricted channel.
e.
exclusive dealing.
165. Redlands Distributing wants to carry Tide detergent products, made by Procter & Gamble. P&G agrees, but only if
the supplier also purchases P&G's entire line of detergents such as Gain, Dreft, and Cheer. If this were to occur, Procter &
Gamble would be engaging in which of the following channel management practices?
a.
Exclusive dealing
b.
Dual distribution
c.
Tying agreement
d.
Refusal to deal
e.
Restricted sales territories
166. Suppose that Jackson Distributing has been told that it cannot carry the beers made by Anheuser-Busch because it
also carries the products of the competitor, Miller Brewing. Jackson is then told that it must drop the Miller brands in
order to carry the Anheuser-Busch products. If this were true, Anheuser-Busch would be engaging in which of the
following channel management practices?
a.
Exclusive dealing
b.
Dual distribution
c.
Tying contacts
d.
Refusal to deal
e.
Restricted sales territories
167. Scenario 14.1
Use the following to answer the questions.
Liz Claiborne, Inc. markets several different brands, under their own Claiborne name label, as well as others. Their
primary brands, such as Liz Claiborne, Liz & Co, and DKNY, are sold to wholesalers. These brands are then available
through retail department stores such as Kohl's and Macy's. Their wholesale-based brands division is positioned as
customer-focused and cost-efficient. Their premium brands division includes labels such as Kate Spade, Juicy Couture,
and Mexx. These premium brands are sold through stores that the Claiborne company owns.
Refer to Scenario 14.1. Liz Claiborne, Inc. uses which type of channel of distribution for its premium brands?
a.
A short, direct channel
b.
A long, direct channel
c.
Dual distribution
d.
Horizontal integration
e.
Intensive distribution
168. Scenario 14.1
Use the following to answer the questions.
Liz Claiborne, Inc. markets several different brands, under their own Claiborne name label, as well as others. Their
primary brands, such as Liz Claiborne, Liz & Co, and DKNY, are sold to wholesalers. These brands are then available
through retail department stores such as Kohl's and Macy's. Their wholesale-based brands division is positioned as
customer-focused and cost-efficient. Their premium brands division includes labels such as Kate Spade, Juicy Couture,
and Mexx. These premium brands are sold through stores that the Claiborne company owns.
Refer to Scenario 14.1. The Liz & Co brand is sold only at J.C. Penney's. This is an example of ____ distribution.
a.
selective
b.
routine
c.
horizontal
d.
intensive
e.
exclusive
169. Scenario 14.1
Use the following to answer the questions.
Liz Claiborne, Inc. markets several different brands, under their own Claiborne name label, as well as others. Their
primary brands, such as Liz Claiborne, Liz & Co, and DKNY, are sold to wholesalers. These brands are then available
through retail department stores such as Kohl's and Macy's. Their wholesale-based brands division is positioned as
customer-focused and cost-efficient. Their premium brands division includes labels such as Kate Spade, Juicy Couture,
and Mexx. These premium brands are sold through stores that the Claiborne company owns.
Refer to Scenario 14.1. If Liz Claiborne were to distribute their Kate Spade brand through its company-owned stores and
through wholesalers, to major department stores, then Liz Claiborne would be using ____ distribution.
a.
intensive
b.
vertical
c.
horizontal
d.
dual
e.
exclusive
170. Scenario 14.1
Use the following to answer the questions.
Liz Claiborne, Inc. markets several different brands, under their own Claiborne name label, as well as others. Their
primary brands, such as Liz Claiborne, Liz & Co, and DKNY, are sold to wholesalers. These brands are then available
through retail department stores such as Kohl's and Macy's. Their wholesale-based brands division is positioned as
customer-focused and cost-efficient. Their premium brands division includes labels such as Kate Spade, Juicy Couture,
and Mexx. These premium brands are sold through stores that the Claiborne company owns.
Refer to Scenario 14.1. Which of the following is most likely the primary factor Liz Claiborne, Inc. used when selecting
the marketing channel for its Juicy Couture brand?
a.
characteristics of the intermediaries
b.
product attributes
c.
type of organization
d.
marketing environmental forces
e.
competition
171. Scenario 14.2
Use the following to answer the questions.
Star Supplies, Inc. manufactures commercial-grade floor cleaners, such as vacuums and floor polishers. The firm has
recently begun manufacturing other janitorial-related product lines, such as paper products and chemical cleaners. Star
Supplies distributes its products in two ways. It sells its vacuum, floor polisher, and janitorial supply products to an
independent business that takes title to the products and then sells them to various small businesses throughout the region.
Also, Star has a list of large businesses that it distributes to directly, on an as-needed basis. These businesses keep very
little inventory and purchase janitorial supplies in small quantities. Recently, Star has decided to add two new service
product lines-paper shredding and a uniform rental service. Clint Rodriguez, the marketing manager, is conducting a
meeting to discuss the ways in which Star can strategically manage these new businesses. Star has the choice of marketing
the paper shredding service to their large business clients, by picking up the paper as they drop off the other janitorial
supplies, or they can buy a small paper shredding business and market to both large and small business customers. With
regard to the uniform rental service, Star can either pick up and deliver the uniforms to the small businesses themselves,
or contract that out to a third party.
Refer to Scenario 14.2. Star Supplies, Inc. is most likely using which of the following to market its vacuum, floor polisher,
and janitorial supplies to its small business customers?
a.
Wholesalers
