1. The task method of budgeting focuses on the amount being spent by competitors.

True or False

2. Which of the following best describes the nature of personal selling?

Multiple Choice

• It involves direct spoken communication between sellers and potential customers.

• It costs less than advertising for reaching a large, widespread market.

• It tries to communicate with many customers at the same time.

• It refers to "promoting" at trade shows, demonstrations, and contests.

• It is less flexible than mass selling

3. .Agent wholesalers are

Multiple Choice

• mainly concerned with buying and selling.

• used by small companies that want a wholesaler to assume all of the risk of carrying inventory.

• specialists in certain geographic areas, rather than specializing by product or customer type.

• at a disadvantage because manufacturers expect them to pay for products before they are shipped.

• None of these answers is correct.

4. While reviewing this month's numbers, a retail manager noticed that the stockturn rate was much higher than last month. What does this mean?

Multiple Choice

• Product is selling more quickly this month than last.

• Product is selling less quickly this month compared to last.

• Their costs have risen.

• Their profits have declined.

• None of these answers relates to stockturn rate.

5. A tire manufacturer currently produces tires in small quantities as they are ordered. The company learns that it can reduce costs significantly by producing one type of tire at a time in large quantities and storing its unsold tires for later sale. Should the company switch to large quantity production?

Multiple Choice

• No, because this will prevent the company from providing tires as they are ordered.

• No, because this will cause the company to incur unexpected transportation costs.

• Yes, because this will help the company in achieving economies of scale in production.

• Yes, because this will allow the company to utilize JIT delivery systems.

• No, because this will not enable the company to improve its production speed per tire.

6. Which of the following statements about just-in-time delivery is FALSE?

Multiple Choice

• Just-in-time shifts greater responsibility for physical distribution backward in the channel.

• Just-in-time reduces storing and handling costs for everyone in the channel.

• Just-in-time increases the coordination needed among channel members.

• Just-in-time reduces storing and handling costs for business customers.

7. Exclusive distribution

Multiple Choice

• should generally be used only if it is not possible to generate intermediary interest in intensive distribution.

• is legal as long as it does not involve vertical channel arrangements.

• is an arrangement between a producer and intermediary that is illegal for most types of products in the United States; thus it is not very common.

• usually involves intermediaries who are willing to take over all responsibility for promoting the producer's product.

• None of these answers is correct.