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Questions and Answers
The Federal Aviation Administration regulates air freight charges.
The Federal Aviation Administration regulates air freight charges.
False (B)
Shipping between Seattle, Washington, and Los Angeles, California is called intracoastal shipping.
Shipping between Seattle, Washington, and Los Angeles, California is called intracoastal shipping.
False (B)
A company's profit is equal to its return on investment.
A company's profit is equal to its return on investment.
False (B)
Bartering involves the exchange of goods or services for a mutually agreed-on amount of money.
Bartering involves the exchange of goods or services for a mutually agreed-on amount of money.
Retailers often demand that products have a Universal Product Code because the codes save the retailers time.
Retailers often demand that products have a Universal Product Code because the codes save the retailers time.
Penetration pricing encourages volume sales which increase a company's profit margin but also increase its fixed costs.
Penetration pricing encourages volume sales which increase a company's profit margin but also increase its fixed costs.
Very little price changes will be made for products introduced with skimming prices.
Very little price changes will be made for products introduced with skimming prices.
Retailers who discount an item's retail price also reduce his or her markup on the item.
Retailers who discount an item's retail price also reduce his or her markup on the item.
Flashcards
Intermodal Transportation
Intermodal Transportation
Combining two or more modes of transportation (like trucks, trains, and ships) to maximize the advantages of each for efficient and cost-effective goods movement.
Skimming Pricing
Skimming Pricing
A type of pricing strategy where a company sets a high price for a new product to maximize profits during the early stages of the product life cycle.
Penetration Pricing
Penetration Pricing
A pricing strategy that aims to attract a large customer base by offering a product at a low price, with the goal of increasing market share and sales volume.
Loss Leader
Loss Leader
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Minimum Price Laws
Minimum Price Laws
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E-tailing
E-tailing
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Bartering
Bartering
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Markup
Markup
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Study Notes
Business Costs and Distribution
- In business, the cost of physical distribution is exceeded only by labor costs.
- Intermodal transportation combines multiple transport methods to maximize each method's advantages.
- The Federal Aviation Administration controls air freight fees.
- Contract carriers do not have to publish rates, as they negotiate individually with clients.
- Shipping between Seattle and Los Angeles is not intracoastal, but rather cross-country.
- National chains utilize centralized buying to save money and present a unified brand image.
- Extra dating encourages buyers to purchase new items.
- While purchasing managers oversee master production schedules, others participate in scheduling.
- Retailers often demand Universal Product Codes for time savings.
- Advance dating arrangements occur for shipping pre-arrangement.
Company Profit and Pricing
- A company's profit is not equivalent to its return on investment.
- Bartering involves exchanging goods and services.
- Some companies with similar products can compete by adding utility.
- Retailers in states with minimum price laws are disallowed from loss-leader techniques.
- Punishing retailers was outlawed by the Robinson-Patman Act of 1975.
- Online retail (e-tailing) has increased the use of flexible pricing.
- Penetration pricing boosts volume sales, increasing profit margins while simultaneously increasing fixed costs.
- Outdated technology in the U.S. might still be in the growth phase in other parts of the world.
- Price point cannot be set too low as customers will always prefer low-cost, and this does not automatically generate a targeted market.
- Skimming pricing does not see price changes frequently.
- Retailers lowering retail price also reduces their profit margin.
- Employee discounts often do not compensate for lower wages.
- Discounts can facilitate faster invoice payment.
- Percentage discounts are calculated by dividing the discount amount by the original price, then multiplying by 100.
- Trade discounts are not linked to manufacturer-to-wholesaler-to-retailer prices.
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Description
Explore the essential concepts surrounding business costs, distribution methods, and pricing strategies. Understand how intermodal transportation and centralized buying impact profitability and efficiency in operations. Test your knowledge on key terms and practices that define the modern business landscape.
