ch.12

Question 1

What is a distribution channel

Answer 1

Institutions that transfer the ownership of goods and move goods from the point of production to the point of consumption

Question 2

What is logistics management

Answer 2

Describes the integration of two or more activities to plan, implement, and control the efficient flow of raw materials, in-process inventory, and finished goods from the point of origin to the point of consumption

Question 3

What is the supply chain management

Answer 3

set of approaches and techniques firms employ to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores, and transportation intermediaries into a seamless value chain in which merchandise is produced and distributed in the right quantities, to the right locations, and at the right time.

Question 4

What are wholesalers

Answer 4

Those firms engaged in buying, taking title to, often storing, and physically handling goods in large quantities, and then reselling the goods (usually in smaller quantities) to retailers or industrial or business users.

Question 5

Who are the retailers

Answer 5

sell products directly to costumers

Question 6

What are the 3 types of channels structure?

Answer 6

direct distribution, indirect distribution and multi-channel distribution.

Question 7

Explain direct distribution

Answer 7

there are no intermediaries between the buyer and the seller. Typically the seller is a manufacturer.

Question 8

Explain indirect distribution

Answer 8

One or more intermediaries work with manufacturers to provide goods and services to consumers.

Question 9

Multi-channel distribution

Answer 9

Combination of both direct and indirect distribution channels.

Question 10

What is the push marketing strategy

Answer 10

Designed to increase demand by focusing on wholesalers, distributors, or salespeople, who push the product to consumers via distribution channels.

Question 11

Pull marketing strategy

Answer 11

Designed to get consumers to pull the product into the supply chain by demanding that retailers carry it.

Question 12

What are 3 categories of functions performed by intermediaries

Answer 12

Transactional function (burying, risk-taking, promotion, selling)
Logistical function (physical distribution, risk-taking)
Facilitating function (gathering information, financing)

Question 13

What is the distribution intensity

Answer 13

The number of channel members to use at each level of the supply chain.

Question 14

What is intensive distribution

Answer 14

A strategy designed to get products into as many outlets as possible. They want its products available everywhere. The more exposure they get, the more products they sell.

Question 15

What is exclusive distribution

Answer 15

The strategy of granting exclusive rights to sell to one or very few retail customers so no other customers can sell a particular brand.

Question 16

What is selective distribution

Answer 16

Lies between the intensive and exclusive distribution strategies; uses a few selected customers in a territory.

Question 17

What is a distribution centre

Answer 17

A facility for the receipt, storage, and redistribution of goods to company stores or customers; may be operated by retailers, manufacturers, or distribution specialists.

Question 18

Explain channel conflict

Answer 18

Results when supply chain members are not in agreement about their goals, roles, or rewards.

Question 19

Avoiding channel conflict demand ____ and _____ _______

Answer 19

Avoiding channel conflict demand honest and open communication

Question 20

What is a vertical marketing system?

Name the 3 types

Answer 20

A supply chain in which the members act as a unified system; there are three types: administrated, contractual, and corporate.
Maximize profits working together.

Question 21

Explain the independent distribution channel

Answer 21

In an independent distribution channel the different members (manufacturer, wholesalers, retailers) each attempt to maximize their profit at the expense of the others.

Question 22

Explain the administered vertical marketing

Answer 22

A supply chain system in which there is no common ownership and no contractual relationship, but the dominant channel member controls the channel relationship.

Question 23

Explain the contractual vertical marketing system

Answer 23

A system in which independent firms at different levels of the supply chain join together through contracts to obtain economies of scale and coordination and to reduce conflict.
ex: franchising

Question 24

Franchising

Answer 24

A contractual agreement between a franchisor and a franchisee that allows the franchisee to operate a retail outlet, using a name and format developed and supported by the franchisor.

Question 25

Explain the corporate vertical marketing system

Answer 25

A system in which the parent company has complete control and can dictate the priorities and objectives of the supply chain; it may own facilities such as manufacturing plants, warehouse facilities, retail outlets, and design studios.

Question 26

strategic relationship (partnering relationship)

requires:

Answer 26

A supply chain relationship that the members are committed to maintaining long-term, investing in opportunities that are mutually beneficial; requires

• mutual trust
• open communication
• common goals
• credible commitments.

Question 27

Describe the process of making information flow

Answer 27

Flow 1: customer purchases and sales associate scans UPC. Information is automatically transferred by the retailer.
Flow 2: The point-of-sale (POS) data is transferred to the headquarters
Flow 3: Purchase information transferred to manufacturer from buyer.
Flow 4: In some situations, the sales transaction data are sent directly from the store to the manufacturer, and the manufacturer decides when to ship more merchandise to the distribution centers.
Flow 5: Store communicates with distribution center regarding inventory and delivery.

Question 28

What is data warehouse

Answer 28

Purchase data collected at the point of sale goes into huge database known as sata warehouse

Question 29

What is electronic data interchange (EDI)

Answer 29

the computer-to-computer exchange of business documents from a retailer to a vendor and back.
Information about invoices, orders, transportation routings, retail prices, order status, etc.

Question 30

What is an advanced shipping notice

Answer 30

An electronic document that the supplier sends the retailer in advance of a shipment to tell the retailer exactly what to expect in the shipment.

Question 31

What is the vendor-managed inventory (VMI)

Answer 31

An approach in which the manufacturer is responsible for replenishing inventory to meet retailers’ needs.

Question 32

What does the distribution( or fulfillment) centre performs?

6 things

Answer 32

Inbound transportation
receiving and checking
storing and cross-docking
getting merchandise floor-ready
shipping merchandise to stores
Just in time systems (JIT)

Question 33

Explain Inbound transportation

Answer 33

It involves the coordination of deliveries. If deliveries are missed or are not on time, costs will increase. The dispatcher responsible to co-ordinate the deliveries.
3 steps:
-receiving
-checking
-radio frequency distribution (RFID) tags: The truck moves through the door with (RFID) tags and all the products are recorded.

Question 34

The dispatcher is __________

Answer 34

responsible to co-ordinate the deliveries.

Question 35

What are radio frequency identification (RFID) tags

Answer 35

Tiny computer chips that automatically transmit to a special scanner all the information about a container’s contents or individual products.

Question 36

Explain storing and cross-docking. What are the 3 types of distribution centres

Answer 36

• Traditional: Inefficient process: People take the boxes. Store it in the warehouse. When inventory is needed, they will have to choose the boxes and send them
• Cross-docking: More efficient: Vendor will ship products in pre-packaged for the store When the store needs the merchandise, it is already ready.
• Combination: Combination of cross-docking and traditional. Ex: mountain equipment co-op. use the traditional method for the tent spikes for camping. For the other products, they use cross-docking.

After storing, they need to get merchandise floor-ready and ship it to stores(sophisticated computer systems are used)

Question 37

What does it mean to get merchandise floor-ready

Answer 37

Ready to be placed on the selling floor
Create price & ID labels
Suppliers sometimes ship floor-ready

Question 38

just-in-time (JIT) inventory systems

Answer 38

Inventory management systems designed to deliver less merchandise on a more frequent basis than traditional inventory systems; the firm gets the merchandise “just in time” for it to be used in the manufacture of another product; also known as quick-response (QR) systems in retailing.

Question 39

Why is just-in-time (JIT) inventory system beneficial

Answer 39

It’s expensive to have inventory sitting on shelves. If we tore it in the warehouse and then when we need it, we can ship it out. Less expensive.

• reduced lead time
• increased product availability and lower inventory investment

Question 40

What is Quick response

Answer 40

An inventory management system used in retailing; merchandise is received just in time for sale when the customer wants it. Similar to just-in-time( JIT)

Question 41

What is the risk of just-in-time(JIT) inventory system

Answer 41

If it has shipping difficulties, it can be out of stock.