Fred White Has Just Accepted a Sales Position with the ABC

question 36

Multiple Choice

Fred White has just accepted a sales position with the ABC Health Maintenance Organization, a major provider of health care services. He had been selling medical supplies for some time and found that he understood how customers bought medical supplies. Which of the following is likely to be a characteristic of the health care service purchase?

• A)The buyer does not participate in producing the service.
• B)The quality of services can be predetermined in a similar manner to tangible products.
• C)Customers are engaged in a low involvement purchase process.
• D)A consumer may not have the ability to judge the quality of medical care service even after the service has been provided.

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Definitions:

Zero Inventories

A business strategy aimed at minimizing holding inventory to reduce storage costs and waste, often relying on just-in-time production methods.

Labour Costs

Expenses incurred by a company for the salaries, wages, and other benefits provided to its employees.

Upstream/Downstream

Terms used to describe stages in a production or supply chain process; "upstream" involves raw material extraction or production, while "downstream" refers to the processing, distribution, and selling of finished products.

Direct/Indirect

Terms used to classify costs or activities based on their relationship to a cost object, with direct costs being easily traceable and indirect costs not directly linked.