Conflicts in a Distribution Channel Are Generally More Pronounced When

question 126

Multiple Choice

Conflicts in a distribution channel are generally more pronounced when:

• A)the industry in which the channel exists is a monopoly.
• B)a company relies on other channel members.
• C)the channel members are independent entities.
• D)a company is using a direct distribution strategy.
• E)the channel members share common goals.

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Definitions:

Degree of Operating Leverage

A measure that quantifies the percentage change in a company's operating income resulting from a percentage change in its sales volume.

Net Operating Income

The profit a business makes after subtracting operating costs, yet prior to removing interest and tax expenses.

Contribution Margin Ratio

The contribution margin ratio measures the percentage of sales revenue remaining after covering variable costs, contributing to covering fixed costs and generating profit.

Net Operating Income

A metric that calculates a company's profit after subtracting operating expenses but before interest and taxes are deducted.