Chapter 12 mkt ii

Question 1

Inventory carrying costs can be reduced by

a. using a straight salary compensation plan.
b. hiring additional full-time personnel.
c. allowing personnel to work overtime.
d. increasing the hours worked per week.
e. using a commission compensation system.

Answer 1

e. using a commission compensation system

Question 2

The inventory costs of services include

a. equipment and training costs.
b. management and material costs.
c. service delivery and spoilage costs.
d. salary of service provider and equipment costs.
e. salary of service provider and training costs.

Answer 2

d. salary of service provider and equipment costs.

Question 3

Which of the organizations listed below has the lowest inventory carrying cost?

a. railroad
b. hotel
c. long-term care facility
d. amusement park
e. insurance companies

Answer 3

e. insurance companies

Question 4

The inventory carrying costs of real estate agencies are low because they

a. use a straight salary compensation plan.
b. have employees who work on commission need little inexpensive equipment.
c. allow personnel to work any hours a day and any number of days per week.
d. decrease the number of workdays per week, but increase the hours per day.
e. are responsible for their own training, transportation, and supplies.

Answer 4

b. have employees who work on commission need little inexpensive equipment.

Question 5

The highest inventory carrying costs would most likely be for which of the following services?

a. real estate agencies
b. dry cleaners
c. auto repair centers
d. amusement parks
e. hospitals

Answer 5

e. hospitals

Question 6

Services can be classified according to whether they are __________, they are profit or nonprofit
organizations, or they are government sponsored.

a. national or global
b. use independent contractors
c. privately owned or publicly owned
d. delivered by people or equipment
e. owned by individuals or corporations

Answer 6

d. delivered by people or equipment