Use This Information for Question That Refer to the United

question 127

Multiple Choice

Use this information for question that refer to the United Tools case. Terry Harter is marketing manager for United Tools and Mike O'Reilly is the firm's logistics manager. They work together to make decisions about how to get United's hand and power tools to its customers-a mix of manufacturing plants and final consumers (who buy United tools at a hardware store) . United Tools does not own its own transport facilities and it works with wholesalers to reach its business customers.
Together, Harter and O'Reilly try to coordinate transporting, storing, and product handling activities to minimize cost while still achieving the customer service level their customers and intermediaries want. This usually requires that United keep an inventory of most of its products on hand, but demand for its products is fairly consistent over time so inventory is easy to manage.
Harter has identified four options for physical distribution systems she could use to reach two of her key wholesalers, Ralston Supply and Ricotta Tool Co. The total cost for each option-and the distribution service levels that can be achieved-are as follows: $\begin{array}{c}\begin{array}{lll}\mathbf { \text {Main feature of system:}}\\ \text {1. Airfreight}\\ \text {2. Inland waterways}\\ \text {3. Trucks}\\ \text {4. Rail and regional }\\\text {warehouses}\end{array}\begin{array}{r}\text { Total Cost } \\\$ 1,000,000 \\\$ 300,000 \\\$ 500,000 \\\$ 650,000\\\\\end{array}\begin{array}{c}\text { Distribution Service Level}\\\text { 95 percent }\\\text { 60 percent }\\\text { 70 percent }\\\text { 80 percent}\\\\\end{array}\end{array}$
Ralston Supply expects a very high level (90 percent) of distribution customer service. Ricotta Tool Co. is willing to settle for a 70 percent customer service level, even if that means some products will occasionally be out of stock, if it gets products at a lower price.
For its large retail hardware customers (like Home Depot) , United regularly ships smaller orders directly to individual stores or in some cases to the retail chain's warehouses. Cross-country shipments usually go by rail while regional shipments usually go by truck.
When United Tools considers its total inventory cost, which of the following would NOT be included?

• A) Costs of damage to products while in inventory
• B) Costs of inventory becoming obsolete
• C) Cost of a storage facility
• D) Cost of capital invested in the inventory
• E) All of these should be included in total inventory cost

Describe the umbrella term of Human Resources Management and its encompassing elements.

Analyze the effectiveness of strategic focuses, such as quality online customer service, in gaining a competitive edge.

Understand strategy types used by organizations in compensation and growth contexts.

Appreciate the importance of strategic HR planning in achieving organizational goals and competitive advantage.

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Definitions:

Logical Appeal

A persuasive technique that uses reason and evidence to support an argument or claim.

Company Turnaround

The process of recovering a company from poor performance and financial distress to a stable and profitable state.

Deductive Approach

A logical process of reasoning that starts with a general assertion and leads to a specific conclusion based on evidence or premises.

Stock Market

The Stock Market is a collection of markets where stocks (shares of ownership in businesses) are bought, sold, and issued.