Unit 11: Distribution Decisions - Practice Quiz

1 Which decision identifies the people or organizations that will distribute a product?

2 What does channel length refer to?

3 A company that sells directly to customers uses which type of channel?

4 Which strategy involves selling products through as many outlets as possible?

5 Exclusive distribution usually gives selling rights to:

6 Selective distribution means using:

7 What is a common purpose of motivating channel members?

8 Distribution logistics mainly concerns the movement of products from:

9 Which activity is part of distribution logistics?

10 What is warehousing?

11 Effective distribution logistics helps a company provide products at the:

12 Efficient logistics can help reduce:

13 Reliable product delivery is most likely to improve:

14 Which logistics decision concerns choosing how products will be moved?

15 Inventory management focuses on deciding how much product to:

16 Order processing includes receiving and:

17 Vertical marketing systems coordinate members at different levels of a:

18 In a corporate vertical marketing system, channel activities are controlled by:

19 Charging different intermediaries unfair prices without a valid reason may be considered:

20 Which practice is an ethical concern in distribution?

21 A premium watch manufacturer wants tight control over brand presentation and customer service. Which channel arrangement is most appropriate?

22 A producer must choose between two channels. Channel X generates annual sales of $500,000 with total channel costs of $350,000. Channel Y generates annual sales of $450,000 with total channel costs of $270,000. Based only on expected annual profit, which channel should be selected?

23 A new snack brand seeks rapid national availability and is willing to give up some control over retail presentation. Which distribution intensity best supports this objective?

24 A manufacturer offers retailers higher margins, display allowances, and sales contests to encourage them to promote its products. Which strategy is being used?

25 Retailers complain that a supplier's delivery delays make advertised products unavailable. What is the most appropriate first channel-management response?

26 A manufacturer evaluates distributors using sales growth, inventory levels, customer complaints, and delivery reliability. What channel-management activity does this represent?

27 An online retailer coordinates order processing, warehousing, inventory, and transportation to deliver products at the required service level. This coordination best illustrates:

28 A logistics manager accepts slightly higher transportation costs because faster delivery substantially reduces lost sales and inventory holding costs. Which principle supports this decision?

29 Which flow is included in modern distribution logistics in addition to the physical movement of goods?

30 A firm has a highly rated product, but customers frequently switch brands because it is often unavailable in stores. Which benefit of effective logistics is the firm failing to achieve?

31 A company improves order accuracy from 92% to 99% while maintaining delivery speed. What is the most likely marketing result?

32 Two competitors sell similar products at similar prices. One consistently delivers within 24 hours, while the other takes five days. The first firm's logistics capability primarily creates:

33 A distributor faces unpredictable demand and wants to reduce stockouts without changing its replenishment lead time. Which inventory decision is most appropriate?

34 A company ships lightweight, high-value medical devices that customers need urgently. Which transportation mode is generally most suitable?

35 A retailer places warehouses closer to major customer clusters. Which outcome is most likely?

36 A wholesaler installs an automated system that immediately checks inventory, verifies customer credit, and sends picking instructions after an order is received. Which major logistics decision is primarily improved?

37 A manufacturer owns its wholesalers and retail outlets, coordinating all stages under common ownership. Which system does this represent?

38 Several independent retailers join together to purchase inventory in bulk and operate a shared distribution center. This is an example of:

39 A powerful supplier threatens to stop deliveries unless a small retailer agrees not to stock competing brands, despite having no legitimate efficiency reason. What ethical concern is most evident?

40 A distributor knowingly sells expired products after replacing their date labels. Which ethical principle is most directly violated?

41 A manufacturer finds that target customers require small purchase quantities, immediate availability, broad assortment, and extensive presale advice. Which channel design best reconciles these service-output requirements?

42 A direct channel has annual fixed costs of $480,000 and variable costs of $7 per unit. A distributor channel has annual fixed costs of $40,000 and variable costs of $15 per unit. Above what annual volume does the direct channel become less costly?

43 A technology producer expects demand to be highly uncertain and its product specifications to change within 18 months. Which channel-design criterion should receive the greatest weight when evaluating otherwise comparable alternatives?

44 A manufacturer pays dealers for demonstration units, but customers report that dealers keep the units in storage while claiming the allowance. Which response best combines channel motivation with behavioral control?

45 A producer opens an online store at prices below those charged by its authorized dealers. Dealers retaliate by promoting rival brands. Which intervention most directly addresses the underlying channel conflict?

46 A distributor exceeds its sales quota by discounting heavily, but generates frequent returns, late payments, and poor installation outcomes. Which evaluation system is most appropriate?

47 A logistics manager can reduce transport cost by $180,000 through slower consolidated shipments. The change would increase inventory carrying cost by $70,000, expected stockout cost by $85,000, and order-processing cost by $10,000. Under a total-cost logistics approach, what should the firm do?

48 A firm minimizes each logistics function's budget independently. Purchasing buys in large batches, warehousing reduces space, and transportation waits for full loads. Service deteriorates despite lower departmental costs. Which concept was violated?

49 A service reduction saves $300,000 in annual logistics cost but is expected to reduce sales by $2 million. The contribution margin ratio is 35%, and no other costs change. What is the expected annual effect on profit?

50 Two suppliers offer identical products and prices. Supplier X delivers in two days with 98% order completeness; Supplier Y delivers in one day with 82% completeness. A buyer's production stops if any required line item is missing. Which metric should dominate the buyer's evaluation?

51 Daily demand averages 120 units, and replenishment lead time is five days. The standard deviation of demand during lead time is 40 units. If the desired cycle-service level has , what reorder point should be used?

52 A company operates nine identical warehouses with total safety stock of 9,000 units. Assuming the square-root law applies and demand characteristics remain stable, approximately how much safety stock is required after consolidation to four warehouses?

53 Air freight for 10,000 units costs $9 per unit and takes two days. Sea freight costs $2 per unit and takes 20 days. The shipment's product value is $800,000, and annual inventory carrying cost is 24%. Ignoring all other differences, which option has the lower transport-plus-pipeline-inventory cost?

54 A firm sells a common product platform in four markets, but each market requires different packaging and labels. Forecast error is high at the market level but moderate in aggregate. Which logistics design most effectively reduces mismatch inventory?

55 An independent wholesaler organizes a voluntary network of retailers, develops common purchasing and merchandising programs, and enables the group to compete with corporate chains. What type of channel system is this?

56 A dominant manufacturer coordinates independent retailers through its market power, even though no ownership or franchise contract gives it formal authority. Which system best describes the arrangement?

57 A retailer lets customers order through an app, return products in stores, and view the same real-time inventory across both channels. Store managers resist because online-attributed returns reduce their performance scores. What integration change is most important?

58 A powerful retailer requires suppliers to pay an undisclosed fee for favorable shelf placement while presenting product rankings to consumers as independent recommendations. What is the primary ethical problem?

59 A manufacturer terminates a long-standing distributor immediately after the distributor reports that sales targets were achieved through falsified customer records. The contract permits termination, but comparable violations by larger distributors were ignored. Which concern is most directly raised?

60 A platform uses neighborhood-level data to exclude low-income districts from same-day delivery, although serving those districts has comparable cost, capacity, and security conditions. Which ethical issue is most salient?