Merchandising II

Sheet 1

CHAPTER 1: AN OVERVIEW OF LOGISTICS

Multiple Choice Questions

1. Logistics clearly contributes to ___________ and ___________ utility.

b. form; time

c. place; form

d. possession; time

2. ___________ utility refers to the value or usefulness that comes from a customer being able
to take ownership of a product.

a. Time

b. Place

c. Form

d. Possession

3. ___________ utility refers to having products available where they are needed by
customers.
a. Possession
b. Time
c. Place
d. Form

4. All of the following are types of economic utility except:

a. efficiency
b. productivity
c. quality
d. effectiveness

6. What concept refers to “how well company resources are used to achieve what a company
promises it can do”?
a. efficiency
b. productivity
c. reengineering
d. effectiveness

7. Which of the following is not a reason for the increased importance of logistics?
a. growing power of manufacturers
b. reduction in economic regulation
c. globalization of trade
d. technological advances

8. The ___________ approach indicates that a company’s objectives can be realized by

a. systems

b. supply chain

c. physical distribution

d. materials management

9. The movement and storage of materials into a firm refers to ___________.

a. physical distribution

b. materials management

c. supply chain management

d. materials handling
10. Which concept refers to the storage of finished product and movement to the customer?

a. supply chain management

b. business logistics

c. physical distribution

d. materials management

11. Logistics managers use the ___________ approach to coordinate materials management and
physical distribution in a cost-efficient manner.

a. total cost

b. supply chain

c. balanced

d. intrafunctional logistics

12. A cost trade-off is a situation where:

a. all costs react according to their individual degrees of inflation in the economy.

b. all costs are reflected as a percentage variation from standard costs.

c. some costs increase and some costs decrease.

d. some costs are eliminated by efficient management controls.

13. ___________ refers to being out of an item at the same time there is demand for it.

a. Postponement

b. Tailored logistics

c. Stockout

d. Supplier indifference
14. ____________________ refer to “a set of interdependent institutions necessary to transfer
the title to goods and to move goods from the point of production to the point of consumption.

a. logistics channels
b. negotiations channels
c. marketing channels
d. finance channels

15. Which of the following is not part of the marketing channel?

a. logistics channel

b. negotiations channel

c. management channel

d. finance channel

16. The ownership channel consists of all parties except:

a. customers.

b. manufacturers.

c. wholesalers.

d. retailers.

17. Which channel covers the movement of title to the goods?

a. promotions

b. logistics

c. finance

d. ownership

18. Brokers are intermediaries that are commonly associated with the ___________ channel.

a. promotions

b. finance

c. ownership

d. negotiation
19. Entry-level positions in logistics career s include all of the following Except
________________:

a. Logistics (supply chain) analyst

b. Purchasing manager

c. Customer service manager

d. Consultant

20. Second-level position in logistics careers include all of the following Except
________________:

a. International logistics manager

b. Customer service manager

c. Transportation manager

d. Warehouse operations manager

True-False Questions
1. Absolute and relative logistics costs in relation to gross domestic product (GDP) vary from
country to country. T
2. The four general types of economic utility are production, possession, time, and place. F,
Form
3. Logistics clearly contributes to time and form utility. F, place
4. The current definition of logistics, as promulgated by the Council of Supply Chain
Management Professionals (CSCMP), suggests that logistics is part of supply chain
management. T
5. Logistics is only concerned with forward flows—that is, those directed toward the point of
consumption. F, Forward and backward flow
6. The purpose of logistics is to maximize customer service. F , Define logistics
7. Reductions in economic regulation allowed individual transportation companies flexibility in
pricing and service. T
8. The systems approach indicates that a company’s objectives can be realized by recognizing
the mutual interdependence of the major functional areas of a firm. T
9. Physical distribution is synonymous with materials management. F Define each of them
10. The key to the total cost approach is that all relevant cost items are considered
simultaneously when making a decision. T
11. Stockouts refer to a situation in which a company is out of an item at the same time that there
is demand for that item. T
12. Logistical decisions tend not to be impacted by marketers’ growing emphasis on offering
sustainable products. F tend to be impacted.
13. Many promotional decisions, such as pricing campaigns that lower the price of certain items,
require close coordination between marketing and logistics. T
14. The ownership channel is the one where buy and sell agreements are reached. F negotiation
15. The financing channel handles a company’s credit and payment for goods. T
16. There is no link between the promotions and logistics channels. F close link
17. A broker is a type of intermediary often associated with the negotiations channel. T
18. A commonly used logistical intermediary is the freight forwarder. T
19. Demand forecasting is not considered to be a logistics-related activity. F
20. Packaging can have both a marketing and logistical dimension. T

Essay Questions

1. What are the reasons for the Increased Importance of Logistics?