Which of the Following Statements Is an Advantage of Using

question 58

Multiple Choice

Which of the following statements is an advantage of using distribution centers over direct store delivery?

• A) Individual stores that forecast and draw from a DC are more cost efficient.
• B) The DCs have the advantage of keeping extra merchandise as backup stock in the store.
• C) Direct store delivery is always more expensive.
• D) The DCs enable the retailer to carry less overall inventory.
• E) The DC can always deliver faster than a vendor.

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Definitions:

Endowment Effect

A psychological phenomenon where people ascribe more value to things merely because they own them.

Prospect Theory

A behavioral economic theory that describes how people make decisions under conditions of risk and uncertainty, prioritizing losses differently from gains.

Framing Effect

A cognitive bias where people decide on options based on whether they are presented in positive or negative terms.

Framing Effects

Cognitive biases where people react differently based on how choices or information are presented or "framed" to them.