A Merchant Wholesaler Is Considering Four Physical Distribution Systems and Estimates

question 156

Multiple Choice

A merchant wholesaler is considering four physical distribution systems and estimates the total cost and customer service level for each as follows: $\begin{array}{l}\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { TOTAL COST } \quad \text { CUSTOMER SERVICE LEVEL }\\\begin{array} { l r r } \text { Airfreight } &\quad\quad \$ 1,000,000 &\quad\quad 90 \% \\\text { Inland waterways } & 250,000 & 50 \% \\\text { Truck } & 300,000 & 60 \% \\\text { Rail and warehouse } & 425,000 & 70 \%\end{array}\end{array}$ The best alternative is:

• A) truck.
• B) airfreight.
• C) rail and warehouse.
• D) inland waterways.
• E) Cannot be determined without knowing how the target customers feel about the customer service level.

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Definitions:

Corporate Headquarters

The main office or central administration location of a corporation where key managerial decisions are made.

Personnel Budget

Financial planning for the costs associated with staff, including salaries, benefits, training, and other employee-related expenses.

Task Interdependency

The degree to which tasks within an organization or project require collaboration and coordination among different individuals or teams.

Perceived Goal Incompatibility

Occurs when individuals or groups believe that their goals conflict with those of others, potentially leading to competition or conflict.