The Need for Reverse Channels May Arise When

question 234

Multiple Choice

The need for reverse channels may arise when

• A)a consumer buys something in error and wants to return it.
• B)a firm makes an error in completing an order.
• C)a product is recalled for safety reasons.
• D)a consumer changes his or her mind after purchasing a product.
• E)All these situations create a need for reverse channels.

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Definitions:

Product Cost Method

An accounting method used to assign costs to inventory and cost of goods sold, including direct materials, direct labor, and manufacturing overhead.

Differential Cost

The difference in total cost between two alternatives in making a business decision.

Differential Revenue

The difference in revenue generated from two different business actions or decisions, helping to assess the financial impact of each choice.

Contribution Margin

The difference between sales revenue and variable costs, used to cover fixed costs and to generate profit.