Grocery Retailer Safeway Displays the Thousands of Items It Sells

question 160

Multiple Choice

Grocery retailer Safeway displays the thousands of items it sells in aisles containing related items or product groupings such as the pet food aisle or the soft drink aisle. Why would Safeway display and sell product groupings in this manner?

• A) The groupings increase the number of market-product combinations on the market-product grid, which makes it a more manageable framework for subsequent analysis.
• B) This form of product groupings makes it easier for customers to get in and out of the store more quickly, creating time utility.
• C) The products are grouped so people can relate to them in a more meaningful way when they shop.
• D) Product groupings can be generated quantitatively to show which adhere to the 80/20 rule.
• E) Suppliers get preferential treatment based upon the number of different UPCs they provide.

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Definitions:

Machining Department

A specific section or unit of a manufacturing facility where machining processes, such as drilling, milling, or turning, are carried out.

Manufacturing Overhead

All indirect costs associated with manufacturing a product, like utilities, maintenance, and salaries of support staff.

Assembly Department

A segment of a manufacturing firm where components are put together to form a finished product.

Departmental Predetermined Overhead Rates

The overhead rates assigned to specific departments based on estimated costs and activity levels, used for allocating overhead to products.