Marketing quốc tế 16 managing retailing, wholesaling and logistic

Marketing Management, 14e (Kotler/Keller)
Chapter 16 Managing Retailing, Wholesaling, and Logistics
1) ________ includes all the activities in selling goods or services directly to final consumers for
personal,
nonbusiness use.
A) Wholesaling
B) Retailing
C) Procurement
D) Promoting
E) Warehousing
Answer: B
Page Ref: 447
Objective: 1
AACSB: Analytic skills
Difficulty: Easy
2) Which of the following is true for retailing?
A) Manufacturers are not considered to be retailers as they are engaged in producing the product.
B) Vending machines are considered to be retailing only if they are located within stores.
C) Retailing deals only with goods; it does not include services.
D) Selling from a consumer's home is direct selling, but not retailing.
E) Wholesalers are only considered to be retailers if they are selling to final consumers.
Answer: E
Page Ref: 447
Objective: 1
AACSB: Analytic skills
Difficulty: Easy
3) Which of the following is an example of retailing?
A) Dylan's sends catalogs to retail, industrial, and institutional customers.
B) SEZ U Inc. sells a limited line of fast-moving goods to small retailers for cash.
C) BEL Inc. sells FMCG goods to merchant wholesalers and distributors.
D) Praxis International sells products to consumers directly through the Internet.

E) Hub Styles procures its raw materials directly from farmers in the region.
Answer: D
Page Ref: 447
Objective: 1
AACSB: Analytic skills
Difficulty: Easy

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4) Discount stores that try to keep prices as low as possible are more likely to function using
________ operations.
A) limited service
B) self-selection
C) full-service
D) self-service
E) limited-selection
Answer: D
Page Ref: 448
Objective: 1
Difficulty: Easy
5) Reynold's is a grocery chain that has always catered to mid-market customers. However, the
owner, Mal, has noticed that an influx of new residents are buying mostly the lower-cost
products and products on discount. To attract customers, Mal decides to make a gradual switch to
the discount store format, but to do this, he will have to cut costs wherever possible. Which of
the following types of service should Mal avoid in order to lower costs?
A) limited service
B) self-selection
C) full-service

D) self-service
E) limited-selection
Answer: C
Page Ref: 448
Objective: 1
AACSB: Analytic skills
Difficulty: Easy
6) A large staff, along with a higher proportion of specialty goods and slower-moving items and
many services, are usually features of ________ retailing.
A) self-service
B) self-selection
C) limited service
D) full-service
E) limited-selection
Answer: D
Page Ref: 448
Objective: 1
AACSB: Analytic skills
Difficulty: Easy

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7) In ________ retailing, salespeople are ready to assist in every phase of the "locate-compareselect" process.
A) self-service
B) self-selection
C) full-service
D) limited service
E) limited-selection

Answer: C
Page Ref: 448
Objective: 1
AACSB: Analytic skills
Difficulty: Easy
8) In the ________ type of retailing, customers usually find their own goods, although they can
ask salespeople for assistance.
A) self-service
B) self-selection
C) full-service
D) limited service
E) limited-selection
Answer: B
Page Ref: 448
Objective: 1
AACSB: Analytic skills
Difficulty: Easy
9) Which of the following is true for self-service retailing?
A) These retailers carry more shopping goods and services such as credit and merchandise-return
privileges.
B) This service model is favored by discount stores and customers who want to save money.
C) It results in high staffing costs compared to other forms of retailing.
D) Salespeople are ready to assist in every phase of the "locate-compare-select" process.
E) Customers need more information and assistance than in other forms of retailing.
Answer: B
Page Ref: 448
Objective: 1
AACSB: Analytic skills
Difficulty: Easy

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10) Which of the following types of retailing generally entails the highest costs?
A) full-service
B) self-service
C) limited-selection
D) limited service
E) self-selection
Answer: A
Page Ref: 448
Objective: 1
AACSB: Analytic skills
Difficulty: Easy
11) Which of the following is an example of a limited-service retailer?
A) Customers at TAB pick out the products they want and pay at the checkout counter.
B) Salespeople at Eli are always on hand to offer shoppers advice and assistance in choosing
products.
C) Mina's allows customers to checkout their own purchases in order to reduce the staff count.
D) As CLO's offers a number of merchandise-return privileges, customers need information and
assistance while shopping.
E) Alison's stocks a number of specialty products and the store's salespeople generally help
shoppers with all their needs.
Answer: D
Page Ref: 448
Objective: 1
AACSB: Analytic skills
Difficulty: Easy
12) Bill and Josh are considering opening a retail store. They have identified their target market

and location and are finalizing the details of the merchandise they will carry. Since the
neighborhood is rundown and the customers in the area are very price-conscious, Bill and Josh
want to offer goods from well-known brands, but at lower rates than the full retail prices of the
products. They choose to stock excess production from manufacturers or goods that have
remained unsold at other retailers. This is a description of a(n) ________ retailer.
A) off-price
B) specialty
C) discount
D) department
E) catalog
Answer: A
Page Ref: 449
Objective: 1
AACSB: Analytic skills
Difficulty: Moderate

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13) H&A is a retail chain that specializes in selling goods at very low prices. To achieve this, it
stocks a very narrow assortment of basic necessities and offers customers a "no-frills" shopping
experience. H&A is an example of a(n) ________ store.
A) off-price
B) specialty
C) hard-discount
D) superstore
E) convenience
Answer: C
Page Ref: 449

Objective: 1
AACSB: Analytic skills
Difficulty: Easy
14) E&OE produces and markets its own brand of skincare products using herbal remedies and
natural ingredients through standalone stores as well as an online portal. E&OE is a(n) ________
retailer.
A) off-price
B) specialty
C) discount
D) department
E) extreme value
Answer: B
Page Ref: 449
Objective: 1
AACSB: Analytic skills
Difficulty: Easy
15) A factory outlet is an example of a(n) ________ retailer.
A) off-price
B) specialty
C) discount
D) department
E) catalog
Answer: A
Page Ref: 449
Objective: 1
AACSB: Analytic skills
Difficulty: Easy

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16) Companies who sell products door-to-door or at home sales parties are engaging in
________.
A) franchising
B) network marketing
C) direct-response marketing
D) corporate selling
E) direct marketing
Answer: B
Page Ref: 449
Objective: 1
AACSB: Analytic skills
Difficulty: Easy
17) Which of the following is an example of direct selling?
A) E&OE sells its herbal skincare products exclusively through its stand-alone stores.
B) TCJ is a telemarketing firm that sells products from a number of different suppliers.
C) Jayne's sells most of its products to customers through home sales parties.
D) J3 is an online shopping portal where customers can buy directly from manufacturers.
E) Reynold's tries to minimize its staff costs by installing vending machines in its stores.
Answer: C
Page Ref: 449
Objective: 1
AACSB: Analytic skills
Difficulty: Easy
18) Which of the following is an example of direct marketing?
A) E&OE sells its herbal skincare products exclusively through its stand-alone stores.
B) TCJ is a telemarketing firm that sells products from a number of different suppliers.
C) Jayne's sells most of its products to customers through home sales parties.
D) J3 is a storeless retailer that organizes the retail activity of the employees of four firms.

E) Reynold's tries to minimize its staff costs by installing vending machines in its stores.
Answer: B
Page Ref: 449
Objective: 1
AACSB: Analytic skills
Difficulty: Easy

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19) The ________ marketing sales system works by recruiting independent businesspeople who
act as distributors.
A) catalog
B) multilevel
C) direct-response
D) corporate
E) direct
Answer: B
Page Ref: 449
Objective: 1
AACSB: Analytic skills
Difficulty: Easy
20) In ________, a salesperson goes to the home of a host who has invited friends, demonstrates
the products and takes orders.
A) catalog marketing
B) franchising
C) direct-response selling
D) network marketing
E) direct marketing

Answer: D
Page Ref: 449
Objective: 1
AACSB: Analytic skills
Difficulty: Easy
21) Telemarketing is a type of ________.
A) direct selling
B) network marketing
C) multilevel selling
D) close-range marketing
E) direct marketing
Answer: E
Page Ref: 449
Objective: 1
AACSB: Analytic skills
Difficulty: Easy

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22) Electronic shopping is a type of ________.
A) direct selling
B) network marketing
C) multilevel selling
D) corporate selling
E) direct marketing
Answer: E
Page Ref: 449
Objective: 1

AACSB: Analytic skills
Difficulty: Easy
23) Which of the following is true of store retailers?
A) A hard-discount store offers a wider merchandise mix than discount stores at higher prices.
B) A discount store offers leftover goods, overruns, and irregular merchandise sold at less than
retail.
C) A specialty store generally stocks a very narrow product line.
D) An extreme value store generally has a broad selection of high-markup, brand-name goods.
E) A catalog showroom is a large, low-cost, low-margin, high-volume, self-service store.
Answer: C
Page Ref: 449
Objective: 1
AACSB: Analytic skills
Difficulty: Easy
24) A ________ is a storeless retailer serving a specific clientele—usually employees of large
organizations—who are authorized to buy from a list of retailers that have agreed to give
discounts in return for inclusion on the list.
A) direct-selling vendor
B) direct marketing vendor
C) buying service
D) automatic vendor
E) corporate retailer
Answer: C
Page Ref: 449
Objective: 1
AACSB: Analytic skills
Difficulty: Easy

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25) An independent retailer using a central buying organization and joint promotion efforts with
other retailers is part of a ________.
A) corporate chain store
B) voluntary chain
C) retailer cooperative
D) merchandising conglomerate
E) franchise organization
Answer: C
Page Ref: 450
Objective: 1
Difficulty: Easy
26) A ________ is a retail firm owned by its customers. Members contribute money to open their
own store, vote on its policies, elect a group to manage it, and receive dividends.
A) retailer cooperative
B) voluntary chain
C) consumer cooperative
D) merchandising conglomerate
E) franchise organization
Answer: C
Page Ref: 450
Objective: 1
Difficulty: Easy
27) A ________ is wholesaler-sponsored group of independent retailers engaged in bulk buying
and common merchandising.
A) retailer cooperative
B) voluntary chain
C) consumer cooperative
D) merchandising conglomerate

E) franchise organization
Answer: B
Page Ref: 450
Objective: 1
Difficulty: Easy
28) Which of the following is true for franchisors?
A) The franchisor has to pay the franchisee to be part of the franchise system.
B) The franchisor licenses the trade mark from the franchisee.
C) The franchisor must change its operations to suit those of the franchisee's.
D) The franchisor collects royalty payments from the franchisee.
E) The franchisor pays start-up costs for the franchisee.
Answer: D
Page Ref: 450
Objective: 1
Difficulty: Easy
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29) Which of the following is true for franchisees?
A) The franchisee is paid by the franchisor to be part of the franchise system.
B) The franchisee licenses a trade mark to the franchisor.
C) The franchisee must change its operations to suit those of the franchisor's.
D) The franchisee collects royalty payments from the franchisor.
E) The franchisee owns the trade or service mark.
Answer: C
Page Ref: 450
Objective: 1
Difficulty: Easy
30) Which of the following is a benefit of franchising for franchisees?

A) The franchisee finds it easier to borrow money from financial institutions.
B) The franchisee receives ownership of the franchisor's trade mark.
C) The franchisee must change its operations to suit those of the franchisor's.
D) The franchisee collects royalty payments from the franchisor.
E) The franchisee is paid by the franchisor for being part of the system.
Answer: A
Page Ref: 450
Objective: 1
Difficulty: Easy
31) Jake wants to open a Subway franchise in his small town. To do this, he must pay the
company a ________ fee.
A) slotting
B) title
C) royalty
D) merchandising
E) residual
Answer: C
Page Ref: 450
Objective: 1
Difficulty: Easy
32) Which of the following is true for the retail industry?
A) Discount stores and catalog showrooms are competing for the same customers.
B) Upscale retailers see a decline in sales as middle-market retailers thrive.
C) Small, specialized retailers are crowding out larger, more diverse retailers.
D) Store retailing sees no competition from non-store retailing.
E) Discount stores are not doing as well as middle-market retailers.
Answer: A
Page Ref: 452
Objective: 3
Difficulty: Easy

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33) Electronic shelf labeling allows retailers to ________.
A) check inventory levels instantaneously
B) order electronically from suppliers
C) run continual promotional messages
D) advertise sales and special offers
E) change price levels instantaneously
Answer: E
Page Ref: 452
Objective: 3
Difficulty: Easy
34) Staples is a giant retailer that concentrates on selling office supplies. Staples is an example of
a(n) ________.
A) ambush marketer
B) supercenter
C) megamarketer
D) category killer
E) guerilla marketer
Answer: D
Page Ref: 452
Objective: 3
Difficulty: Easy
35) In the corporate headquarters of a supermarket chain, ________ are responsible for
developing brand assortments and listening to salespersons' presentations.
A) central buyers
B) brokers

C) specialist buyers
D) agents
E) specialized wholesalers
Answer: C
Page Ref: 455
Objective: 2
Difficulty: Easy
36) In supermarkets and other retail outlets, RFID is used to ________.
A) change prices instantaneously
B) check for spoilage or damage to goods
C) advertise special offers and discounts
D) run continual promotional messages
E) monitor inventory and track goods
Answer: E
Page Ref: 455
Objective: 2
Difficulty: Easy

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37) Which of the following is true for direct product profitability analysis?
A) It is highly correlated with the gross margin on a product.
B) It is negligible compared to the gross margin on a product.
C) It bears little relation to the gross margin on a product.
D) It is significantly lower than the gross margin on a product.
E) It is exactly the same as the gross margin on a product.
Answer: C
Page Ref: 456

Objective: 2
AACSB: Analytic skills
Difficulty: Easy
38) Mass merchandisers and discount stores typically fall into the ________ group with respect
to margins and volume.
A) mixed markup, high-volume
B) low-volume, mixed markup
C) low-volume, low-markup
D) high-volume, low-markup
E) high-markup, lower-volume
Answer: D
Page Ref: 456
Objective: 2
AACSB: Analytic skills
Difficulty: Easy
39) A store selling expensive artwork and luxury goods typically falls into the ________ group
with respect to margins and volume.
A) mixed markup, high-volume
B) low-volume, mixed markup
C) low-volume, low-markup
D) high-volume, low-markup
E) high-markup, low-volume
Answer: E
Page Ref: 456
Objective: 2
AACSB: Analytic skills
Difficulty: Easy

12
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40) Most retailers will put low prices on some items in order to increase traffic to the store.
These low-priced products are known as ________.
A) loss leaders
B) price ceilings
C) price skimmers
D) price floors
E) cold calls
Answer: A
Page Ref: 456
Objective: 2
AACSB: Analytic skills
Difficulty: Easy
41) American businessman King Gillette pioneered the sales model in which razor handles were
given away for free or sold at a loss, but sales of disposable razor blades were very profitable.
This is known as the _______ model.
A) two-tiered pricing
B) predatory pricing
C) cross selling
D) loss leading
E) product churning
Answer: D
Page Ref: 456
Objective: 2
AACSB: Analytic skills
Difficulty: Moderate
42) Which of the following is a prepurchase service offered by retailers?
A) accepting orders over the telephone
B) shipping the product

C) delivery to the customer's doorstep
D) general information
E) interior decoration of the retail outlet
Answer: A
Page Ref: 457
Objective: 2
Difficulty: Easy

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43) Which of the following is a postpurchase service offered by retailers?
A) accepting orders over the telephone
B) advertising and window displays
C) delivery to the customer's doorstep
D) general information
E) interior decoration of the retail outlet
Answer: C
Page Ref: 457
Objective: 2
Difficulty: Easy
44) Which of the following is an ancillary service offered by retailers?
A) accepting orders over the telephone
B) advertising and window displays
C) delivery to the customer's doorstep
D) general information
E) alterations and tailoring
Answer: D
Page Ref: 457

Objective: 2
Difficulty: Easy
45) In your neighborhood there is a small men's store that has a limited selection of clothing, but
the selection that is carried is of very high quality and price. Services include free alterations and
tailoring, personalized record keeping, and free dry cleaning. The inside of the store has deep
leather chairs and couches and thick pile carpet. Upon entering the store, a customer feels
"special and rich." In terms of differentiation, what is this retailer trying to communicate by its
decorations and service level?
A) differentiation based on services mix and atmosphere
B) differentiation based on prepurchase services
C) differentiation based on postpurchase services and atmosphere
D) differentiation based on ancillary services and atmosphere
E) differentiation based on prepurchase and postpurchase services
Answer: A
Page Ref: 457
Objective: 2
AACSB: Reflective thinking
Difficulty: Easy

14
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46) Which of the following is the strongest differentiator for brick-and-mortar stores who want to
emphasize their superiority over online retailers?
A) product quality
B) the shopping experience
C) product range
D) pricing
E) the retailer's reputation

Answer: B
Page Ref: 457
Objective: 2
AACSB: Analytic skills
Difficulty: Easy
47) A brand developed by a retailer and/or wholesaler that is available only in selected retail
outlets is called a ________ brand.
A) generic
B) franchisee
C) marque
D) national
E) private-label
Answer: E
Page Ref: 459
Objective: 4
AACSB: Analytic skills
Difficulty: Easy
48) Though it is sold only in Wal-Mart stores, Wal-Mart's Ol'Roy dog food has surpassed Nestlé's
Purina brand as the top-selling dog food. Ol'Roy is an example of a ________.
A) generic product
B) national brand
C) franchise
D) copy-cat brand
E) private label
Answer: E
Page Ref: 459
Objective: 4
AACSB: Analytic skills
Difficulty: Moderate

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49) Which of the following is true for distributor brands?
A) They sell at higher volumes than national brands and are also known as generics.
B) They are usually sold at higher prices than national brands because production costs are
higher.
C) They are always of better quality than national brands as production is strictly monitored.
D) Distributor brands can be sold at lower prices yet generate a higher profit margin because of
their lower cost structure.
E) Advertising and sales promotion costs for distributor brands are much higher than those for
national brands.
Answer: D
Page Ref: 460
Objective: 4
AACSB: Reflective thinking
Difficulty: Easy
50) ________ are unbranded, plainly packaged, less expensive versions of common products
such as spaghetti, paper towels, and canned peaches.
A) Common carriers
B) Shills
C) Generics
D) Private labels
E) Marques
Answer: C
Page Ref: 460
Objective: 4
AACSB: Analytic skills
Difficulty: Easy

51) In addition to its store brands and nationally well-known brands of detergents, Reynold's also
carries much cheaper varieties of detergents that are not advertised and have little-known names.
They are often manufactured from lower-quality ingredients and save on packaging and
advertising costs. These are known as ________.
A) common carriers
B) shills
C) generics
D) private labels
E) marques
Answer: C
Page Ref: 460
Objective: 4
AACSB: Analytic skills
Difficulty: Moderate

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52) Because shelf space is scarce, many supermarkets now charge a ________ for accepting a
new brand, to cover the cost of listing and stocking it.
A) retainer
B) slotting fee
C) residual fee
D) contingent fee
E) royalty
Answer: B
Page Ref: 460
Objective: 4
AACSB: Analytic skills

Difficulty: Easy
53) ________ includes all the activities in selling goods or services to those who buy for resale
or business use.
A) Retailing
B) Wholesaling
C) Procurement
D) Promoting
E) Warehousing
Answer: B
Page Ref: 461
Objective: 1
Difficulty: Easy
54) Which of the following is considered a wholesaler?
A) retailers
B) brokers
C) producers
D) manufacturers
E) farmers
Answer: B
Page Ref: 461
Objective: 1
Difficulty: Easy
55) ________ are independently owned businesses that take title to the merchandise they handle.
They are full-service and limited-service jobbers, distributors, and mill supply houses.
A) Brokers
B) Agents
C) Merchant wholesalers
D) Specialized wholesalers
E) Retailers' branches
Answer: C

Page Ref: 462
Objective: 1
Difficulty: Easy
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56) ________ 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
Answer: D
Page Ref: 462
Objective: 1
Difficulty: Easy
57) ________ 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
Answer: C
Page Ref: 462
Objective: 1
Difficulty: Easy
58) The owner of supermarket chain Reynold's has realized that customers want a wider variety

of goods than is currently available. However, Reynold's cannot afford the costs of storing excess
inventory. Additionally, the owner is not willing to take the risk that the new products will
remain unsold. Which of the following types of wholesalers can help Reynold's meet customer
demand while minimizing costs?
A) Producers' cooperatives
B) Cash and carry wholesalers
C) Truck wholesalers
D) Drop shippers
E) Rack jobbers
Answer: E
Page Ref: 462
Objective: 1
AACSB: Analytic skills
Difficulty: Moderate

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59) 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
Answer: B
Page Ref: 462
Objective: 1
AACSB: Analytic skills

Difficulty: Easy
60) 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.
Answer: C
Page Ref: 462
Objective: 1
AACSB: Analytic skills
Difficulty: Easy
61) ________ 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
Answer: A
Page Ref: 462
Objective: 1
AACSB: Analytic skills
Difficulty: Easy

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62) ________ encompass sales forecasting, production planning, and inbound materials
transportation.
A) Market logistics
B) Containerization
C) Transportation
D) Nonstore retailing
E) Wholesaling
Answer: A
Page Ref: 464
Objective: 1
AACSB: Analytic skills
Difficulty: Easy
63) 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
Answer: E
Page Ref: 466
Objective: 2
AACSB: Analytic skills
Difficulty: Easy
64) ________ costs for a manufacturer consist of setup costs and running costs.
A) Inventory-carrying
B) Containerization
C) Wholesaling
D) Order-processing
E) Transportation
Answer: D

Page Ref: 467
Objective: 2
Difficulty: Easy
65) 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
Answer: A
Page Ref: 467
Objective: 2
Difficulty: Easy
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66) 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
Answer: B
Page Ref: 467
Objective: 2
AACSB: Analytic skills
Difficulty: Easy
67) 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
Answer: C
Page Ref: 467
Objective: 2
AACSB: Analytic skills
Difficulty: Easy
68) 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.
Answer: C
Page Ref: 467
Objective: 2
AACSB: Analytic skills
Difficulty: Moderate

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69) 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.
Answer: D
Page Ref: 467
Objective: 2
AACSB: Analytic skills
Difficulty: Moderate
70) 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
Answer: A
Page Ref: 467-468
Objective: 2
AACSB: Communications
Difficulty: Easy
71) 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
Answer: B
Page Ref: 468
Objective: 2
AACSB: Analytic skills
Difficulty: Moderate

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72) 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
Answer: E
Page Ref: 468
Objective: 2
Difficulty: Easy
73) 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
Answer: A
Page Ref: 468

Objective: 2
AACSB: Analytic skills
Difficulty: Moderate
74) ________ 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
Answer: A
Page Ref: 468
Objective: 2
AACSB: Analytic skills
Difficulty: Easy

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75) 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.
Answer: E
Page Ref: 468
Objective: 2
AACSB: Analytic skills

Difficulty: Moderate
76) 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
Answer: E
Page Ref: 468
Objective: 2
AACSB: Analytic skills
Difficulty: Easy
77) 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
Answer: B
Page Ref: 468
Objective: 2
Difficulty: Easy
78) Retailing includes all the activities involved in selling goods or services directly to final
consumers.
Answer: TRUE
Page Ref: 447
Objective: 1

AACSB: Analytic skills
Difficulty: Easy

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79) Full-service retailers generally have the lowest costs of all retail types.
Answer: FALSE
Page Ref: 448
Objective: 1
Difficulty: Easy
80) Discount stores usually stock leftover goods, overruns, and irregular merchandise, sold at
less than retail.
Answer: FALSE
Page Ref: 449
Objective: 1
AACSB: Reflective thinking
Difficulty: Easy
81) The network marketing sales system works by recruiting independent businesspeople who
act as distributors.
Answer: TRUE
Page Ref: 449
Objective: 1
AACSB: Reflective thinking
Difficulty: Easy
82) Electronic shopping is a form of direct marketing.
Answer: TRUE
Page Ref: 449
Objective: 1

AACSB: Analytic skills
Difficulty: Easy
83) 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.
Answer: FALSE
Page Ref: 449
Objective: 1
AACSB: Analytic skills
Difficulty: Easy
84) A retailer cooperative is a retail firm that is owned by its customers.
Answer: FALSE
Page Ref: 450
Objective: 1
Difficulty: Easy

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Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall