Reference no: EM132241216
1. In comparing penetration and skimming price policies:
- the former is useful when the firm has excess production capacity.
- the former sets a price without considering competition.
- the latter discourages the entrance of competitors.
- the latter is appropriate when demand is price elastic.
2. Why are channel intermediaries (i.e., members of supply chains) useful:
- they increase the number of intrachannel contacts, thus lowering costs.
- they perform special functions manufacturers cannot provide.
- they provide assortments not offered by some manufacturers.
- they sell in larger quantities than manufacturers can handle.
3. Which of these products characteristics would lengthen (increase the number of intermediaries between manufacturer and consumer) a distribution channel (supply chain):
- product exists in many inexpensive sizes (e.g., nails).
- product is complex (e.g., computers).
- product is perishable (e.g., fresh fruit).
- product requires special handling equipment (e.g., blocks of ice).
4. When a customer purchases a DVD at a Best Buy Electronics store, all of the following information flows are started EXCEPT:
- the sale is transmitted to Best Buy’s distribution center to adjust inventory data.
- Best Buy’s buyer aggregates sales at all stores and uses the information to send a reorder to the manufacturer.
- the purchase is added to the customer’s personal and confidential purchasing habit records.
- the sales associate scans the UPC recording the sale.