Chain Of Production Chapter 23

Question 1

What is the wholesaler?

Answer 1

A business that buys in bulk from the manufacturer and sells in smaller quantities to the retailer w.g musgraves cash and carry

Question 2

What is the retailer ?

Answer 2

A person who buys goods and services from the manufacturers or wholesalers and sells them in small quantities to the consumer at a profit.

Question 3

What is a franchise ?

Answer 3

A franchise exists when the owners of a business give permission to another person to set up a branch of their business in another location in return for a fee e.g MCDonald’s, Subway, Costa Coffee.

Question 4

What is the chain / channel of distribution ?

Answer 4

The method used to get goods and services from the producer to the consumer.

Question 5

What is production ?

Answer 5

Combining the four factors of production (resources) so that goods and services are made (produced ) that customers want.

Question 6

What are the types of industries ?

Answer 6

1. Extractive industry: businesses that take or extract raw materials from: The sea, fishing land.
2. Construction and manufacturing industries: construction: businesses involved in the building of houses, roads.
3. Service industry: firms provide a service rather than a product to the consumer e.g. banking, transport

Question 7

What are the types of production?

Answer 7

1. Primary production- all products produced by the firms in the extractive industry e.g. wood
2. Secondary production- all products produced by the construction and manufacturing industry
3. Tertiary production- All services provided by the service industry.

Question 8

What are the considerations when using a channel of distribution?

Answer 8

1. That type of Good, are they perishable bulky or very valuable.
2. Speed, how quickly do the goods need to reach the consumer.
3. Distance, do the goods have to be imported or exported.

Question 9

What are the chains/channels of distribution?

Answer 9

Manufacturer -> consumer { items bought in a factory e.g Waterford glass factory shop.}

Manufacturer -> Retailer -> Consumer { furniture shop buys from furniture factory }

Manufacturer -> Wholesaler -> Retailer -> Consumer { local shop buys goods from a wholesaler }

Question 10

Why would the wholesaler be omitted from a channel of distribution ?

Answer 10

Producer -> manufacturer -> retailer -> consumer

• If it is important to get the product to the consumer quickly.
• retailer wishes to buy in bulk from manufacturer

Question 11

Why would the wholesaler and retailer be omitted from a channel of distribution ?

Answer 11

Producer -> Manufacturer -> Consumer

• the products needs to be customised for the individual consumer e.g fitted / custom furniture.
• advancements in technology may allow the customer to buy directly from the manufacturer. This allows them to buy the products at a lower cost. E.g buying computers from dell over the Internet.