Exam 14: B Supply Chain Management and Marketing Channels

The overall safety stock,or inventory needed to prevent a stockout,depends on the general level of prices.

On-time deliveries may give a firm a competitive edge.

A discount house can store and transport merchandise that is purchased directly from the producer,thus eliminating the need for a wholesaler.This is an example of vertical channel integration.

Product availability is dependent on transportation functions.

Bonded storage means that goods will not be released until U.S.customs duties or federal or state taxes or other fees are paid.

The reorder point is computed by multiplying the service standard by the order lead time.

Supply chains start with the producer.

Public warehouses are business organizations whose primary activity is providing storage and related physical distribution facilities on a rental basis to government organizations.

Private warehouses are usually leased or purchased when a firm believes its warehouse needs are so stable that it can make a long-term commitment to fixed facilities.

Small firms are more likely to be in a position to have more distribution centers that may reduce delivery times to customers.

Like manufacturers' agents,industrial distributors do not take title to products or carry inventories.

Exclusive dealing occurs when a supplier stipulates that a channel member must purchase additional products besides the one it wants.

Business buyers prefer to deal with producers through intermediaries and thus eliminate much of the burden of sorting out details.

Public warehouses do not furnish security for products being used as collateral for loans.

The use of a freight forwarder that consolidates shipments from several organizations into efficient lot sizes usually increases transit time and sometimes raises shipping costs.

Industrial distributors and their agents are typical types of intermediaries found in channels for consumer products.

Marketing intermediaries never establish pricing policies and terms of sale.

A distribution system's lowest total cost is the result of using a combination of the cheapest functions.

A manufacturer may try to prohibit intermediaries from selling its products outside designated sales territories to tighten control over distribution of its products.

Rail transportation is the fastest yet most expensive form of shipping.