Channel Conflict That Arises When One Member Bypasses Another Member

question 185

Multiple Choice

Channel conflict that arises when one member bypasses another member and sells or buys products directly is referred to as

• A) horizontal conflict.
• B) channel circumvention.
• C) lateral conflict.
• D) disintermediation.
• E) dual distribution.

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Definitions:

Operating Income

The profit realized from a business's operations, calculated by subtracting operating expenses from gross profit.

Absorption Costing

An approach to pricing that incorporates all production-related costs such as direct materials, direct labor, along with variable and fixed overhead expenses, into the product’s cost.

Variable Costing

An accounting method that includes only variable production costs (costs that vary with output) in product costs, while fixed costs are charged to the period they occur.

Operating Income

The financial gain obtained through the main functions of a firm, without considering the reductions for interest and taxes.