Traditional Channels of Distribution

question 124

Multiple Choice

Traditional channels of distribution

• A) do not perform bulk-breaking activities.
• B) are usually preferred to other distribution arrangements.
• C) are easier to control than corporate channel systems.
• D) may involve little or no cooperation among channel members.
• E) are usually controlled through strong legal contracts.

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Definitions:

Operating Leverage (DOL)

A measure of how revenue growth translates into growth in operating income, indicating the fixed versus variable costs of a business.

Variable Cost

A cost that changes in proportion with the level of output or activity.

Fixed Costs

Business expenses that remain unchanged regardless of the level of production or sales activities, such as rent, salaries, and insurance.

Breakeven Volume

The quantity of output or sales at which total revenues equal total costs, resulting in no profit or loss.