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Scenario 15.2 Use the Following to Answer the Questions

question 3

Multiple Choice

Scenario 15.2
Use the following to answer the questions.
Star Supplies,Inc.manufactures commercial-grade floor cleaners,such as vacuums and floor polishers.The firm has recently begun manufacturing other janitorial-related product lines,such as paper products and chemical cleaners.Star Supplies distributes its products in two ways.It sells its vacuum,floor polisher,and janitorial supply products to an independent business that takes title to the products and then sells them to various small businesses throughout the region.Also,Star has a list of large businesses that it distributes to directly,on an as-needed basis.These businesses keep very little inventory and purchase janitorial supplies in small quantities.Recently,Star has decided to add new two new service product lines-paper shredding and a uniform rental service.Clint Rodriguez,the marketing manager,is conducting a meeting to discuss the ways in which Star can strategically manage these new businesses.Star has the choice of marketing the paper shredding service to their large business clients,by picking up the paper as they drop off the other janitorial supplies,or they can buy a small paper shredding business and market to both large and small business customers.With regard to the uniform rental service,Star can either pick up and deliver the uniforms to the small businesses themselves,or contract that out to a third party.
-Refer to Scenario 15.2.Clint's suggestion for the uniform rental service was either picking up and delivering the uniforms themselves,or contracting this to a third party.If Star decides to pick up and deliver the uniforms with its own trucks,this is an example of a(n) ____ channel.If Star contracts this action to a third party,it is called ____.

Definitions:

Legal Entity

An organization or structure that has legal rights and obligations, such as a corporation, partnership, or trust.

Doctrine of Marshaling Assets

A principle in equity that gives a junior creditor the right to request that senior creditors satisfy their claims from assets not pledged by the junior creditor, when possible.

Interest in the Partnership

Refers to a partner’s share or stake in both the assets and profits (or losses) of a partnership, often governed by a partnership agreement.

Share of Profits

A proportion of the profits earned by a business that is allocated to an individual or entity, often based on ownership interest.