Chapter 12

Question 1

administered vertical marketing system

Answer 1

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 2

advanced shipping notice

Answer 2

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 3

channel conflict

Answer 3

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

Question 4

contractual vertical marketing system

Answer 4

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.

Question 5

corporate vertical marketing system

Answer 5

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 6

dispatcher

Answer 6

The person who coordinates deliveries to distribution centres.

Question 7

distribution centre

Answer 7

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 8

distribution channel

Answer 8

The institutions that transfer the ownership of goods and move goods from the point of production to the point of consumption.

Question 9

distribution intensity

Answer 9

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

Question 10

electronic data interchange (EDI)

Answer 10

The computer-to-computer exchange of business documents from a retailer to a vendor and back.

Question 11

exclusive distribution

Answer 11

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

Question 12

franchising

Answer 12

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 13

intensive distribution

Answer 13

A strategy designed to get products into as many outlets as possible.

Question 14

just-in-time (JIT) inventory systems

Answer 14

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 15

lead time

Answer 15

The amount of time between the recognition that an order needs to be placed and the arrival of the needed merchandise at the seller’s store, ready for sale.

Question 16

logistics management

Answer 16

The integration of two or more activities for the purpose of planning, implementing, and controlling the efficient flow of raw materials, in-process inventory, and finished goods from the point of origin to the point of consumption.

Question 17

pull marketing strategy

Answer 17

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

Question 18

push marketing strategy

Answer 18

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

Question 19

quick-response (QR)

Answer 19

An inventory management system used in retailing; merchandise is received just in time for sale when the customer wants it.

Question 20

radio frequency identification (RFID) tags

Answer 20

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

Question 21

retailers

Answer 21

Sell products directly to consumers.

Question 22

selective distribution

Answer 22

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

Question 23

strategic relationship (partnering relationship)

Answer 23

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, and credible commitments.

Question 24

supply chain management

Answer 24

Refers to a 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 25

universal product code (UPC)

Answer 25

The black and white bar code found on most merchandise.

Question 26

vendor-managed inventory (VMI)

Answer 26

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

Question 27

vertical marketing system

Answer 27

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

Question 28

wholesalers

Answer 28

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.