The Two Criteria for Establishing a Particular Physical Distribution System

question 6

Multiple Choice

The two criteria for establishing a particular physical distribution system are:

• A) cost of the system and service level desired
• B) service level and cost of carrying inventory
• C) cost of transportation and cost of warehousing
• D) cost of transportation and materials handling
• E) cost of warehousing and cost of inventory.

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Definitions:

Discount

A reduction in the price of goods or services, typically offered to stimulate sales or to reward customer loyalty.

Normal Credit Balance

Refers to the expected positive balance in accounts that primarily capture credits, such as liabilities, revenues, and equity accounts.

Long-Term Liabilities

Obligations of a company that are due more than one year in the future, including bonds payable, long-term leases, and pension obligations.

Current Liabilities

Obligations or debts that a company is required to settle within one fiscal year or within its operating cycle.