Reference no: EM131036216

Chapter 12 - Designing Global Market Offerings

Multiple Choice Questions

p: 366 1. A global firm is a firm that:
A. treats the world as a portfolio of markets
B. plans, operates, and coordinates business on a worldwide basis
C. standardizes core elements of its business and localizes others
D. relies on indirect export to get its product(s) to the world market
E. needs to reduce its dependence on any one market

p. 367 2. Which of the following describes a reason why firms enter international markets?
A. Most companies simply want to be in foreign markets.
B. International trade eliminates foreign.competition.
C. Foreign markets provide greater profit opportunities than domestic markets.
D. Technological pirating can be avoided in foreign markets.
E. New product development is unnecessary because the product is always new to some market in the world.

p. 367 3. Before a leather goods manufacturer expands into foreign markets, it should consider the risk associated with:
A. underestimating government regulation and as a resultincurring unanticipated costs
B. creating a market so large it cannot be adequately serviced
C. excess domestic capacity if the expansion-effort,is unsuccessful
D. having a home country advantage
K. becoming dependent on a single foreign market

p. 370 4. Which of the following statements describes one of challenges faced by
international marketers?
A. Technological pirating by foreign managers is illegal.
B. The governments of some countries provide huge sums for money to assist foreign competitors.
C. Many governments have protective tariffs and import duties that protect foreign competitors.
D. High indebtedness, high inflation, and high unemployment make some governments unstable.
E. Product adaptation is becoming unnecessary with the creation of international alliances such as NAFTA.

1'70 Part III - DEVELOPING MARKETING STRATEGIES - Chapter 12

p. 370 5. Harley-Davidson convinced the U.S. government to place a quota on large
motorcycles imported into the United States. To Japanese motorcycle manufacturers, this is an example of the international marketing challenge associated with:
A. foreign-exchange problems
B. trade barriers
C. the high cost of product and communication adaptation
D. foreign-government entry requirements
E. technological pirating

p. 370 6. About 90 percent of all Russians live below the poverty level in spite of the fact that over 25,000 foreign companies have invested in Russia. These investors are having to deal with which of the following international marketing challenges?
A. the high cost of product and communication adaptation
B. technological pirating
C. unstable government
D. tariffs and other trade barriers
E. shifting borders

p. 371 7. Generally speaking, it makes sense to operate in fewer countries with a deeper commitment and penetration in each country, but sometimes companies adhere to the belief that they need to be continually looking for new markets. According to Ayal and Zif, a firm should enter fewer rather than more countries when:
A. population and income size are high in the initial. countries chosen
B. communication adaptation costs are low
C. product adaptation is not necessary
D. market entry costs are low
E. dominant foreign firms are unable to establish high barriers to entry

p. 371 8. The term triad market refers to the:
A. Pacific Rim nations of South Korea, Singapore, and Hong Kong
B. United States, Japan, and Western Europe
C. three continents in the eastern hemisphere
D. United States, Canada, and Mexico
E. three most technologically advanced countries in the world-the United States, Japan, and Germany

p. 371 9. The European Union (EU):
A. is composed of all of the countries in Europe
B. requires all member nations use the same currency in all exchanges
C. was created in the 1930s
D. offers tremendous trade opportunities for U.S. and other non-European nations
E. is accurately described by all of the above

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Designing Global Market Offerings 171

p. 372 10. The North American Free Trade Agreement (NAFTA):
A. links Brazilian markets to Canadian markets
B. is the only trade organization Mexico currently belongs to
C. does not eliminate tariffs among participating nations
D. includes all the Central American nations
E. will more than likely eventually expand to include South American countries

p. 373 11. are skeptical about the benefits of a Free Trade Area of the Americas and are highly critical of any proposed plan to unite the markets in the Western Hemisphere.
A. Labor unions
B. Owners of smokestack industries
C. The U.S. Department of Justice
D. Human resource managers
E. Service providers

p. 373 12. The nation that spends the most buying U.S. goods and services is:
A. Japan
B. Germany
C. Canada
D. Great Britain
E. China

p. 373 13. A U.S. paper manufacturer that prefers to do business in Canada, Ireland, and Australia as opposed to Germany, Peru, and Japan would be an example of

- proximity.
A. psychological
B. psychic
C. geographic
D. demographic
E. economic

p. 374 1 14. A paper and pulpwood producer uses an export intermediary who buys the pulpwood from the company and then resells it internationally. The pulpwood producer is using a(n):
A. domestic-based export agent
B. domestic-based export merchant
C. export-management company
D. vertical marketing company

E. cooperative organization

p. 374 15. Which of the following products are most likely to be exported by a cooperative organization?
A. electronics
B. automobiles
C. oranges
D. nails, lumber, and bricks
E. textbooks

172 Part III - DEVELOPING MARKETING STRATEGIES - Chapter 12

p. 374 16. The method of entering a foreign market that involves the least amount of commitment and risk is:
A. direct exporting
B. indirect exporting
C. franchising
D. licensing
E. contract manufacturing

p. 374 17. A poultry producer uses exporting when it exports from time to time in response to unsolicited orders from abroad.
A. active
B. passive
C. occasional
D. responsive
E. direct

p. 374 18. The chemical company that hired and agreed- to pay a fee to a middleman to manage the company's export activities hired a(n):
A. domestic-based export agent
B. cooperative organization
C. overseas sales branch
D. export-management company
E. domestic-based export merchant

p. 374 19. The middleman who carries on exporting activities On behalf of several producers and is partly under their administratiYe control is called a(n):
A. - domestic-based export agent
B. overseas sales branch
C. cooperative organization
D. export-management company
E. domestic-based export merchant.

p. 375 20. In Japan, Kirin breweries brews Budweiser beer using the exact same recipe as is used in the U.S. Kirin pays Anheuser-BuSch a royalty for the right to use this formula. This is an example of
A. contract manufacturing
B. a joint venture
C. a cooperative organization agreement
D. licensing
E. direct investment

p. 375 21. In Tokyo, Disneyland is owned and operated by Oriental Land Company and pays Walt Disney Company 10 percent of all admissions and 5 percent of all food and merchandise sales. This is an example of a agreement.
A. contract manufacturing
B. joint venture
C. cooperative organization
D. direct investment
E. licensing
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Designing Global Market Offerings 173

p. 376 22. Which of the following statements about licensing is true?
A. The licenser needs to provide some proprietary ingredients in order to protect it from pirating by the licensee.
B. Licensing requires more supervision of the investor than any other form of foreign investment.
C. Licensing tends to diminish competition.
D. Licensing is defined as the shared ownership of an enterprise.
E. With licensing, the licensee retains all control of the licensed product or service.

p. 376 23. Management contracting:
A. refers to product rather than service exporting
B. is a less risky form of joint venture
C. yields deferred income
D. is a form of direct investment in an existing company
E. is espeCially attractive if the contracting firm is given an option to purchase some share of the managed company

p. 377 24. UPS entered into a agreement with China's largest transportation company, Sinotrans Pekair. UPS brings technology and expertise to the relationship, and the Chinese company provides. a national distribution network and a staff.
A. contract manufacturing
B.. joint venture
C. cooperative organization
D. direct investment
E. licensing

p. 377 25. International marketing through joint venturing:

A. involves joining local investors with whom the firm shares ownership and control
B.: is a more complex form of franchising
C. is seldom, if ever, required by foreign governments as a condition of entry.
D. is the ultimate and preferred method of entering foreign markets
E. involves more commitment and less risk than licensing

p. 377 26. Which of the following statements describes a potential drawback inherent in joint ventures?
A. Joint ventures require the sharing of resources in order to enter an international market.
B. Iri a joint venture, the foreign investor has no control over the domestic partner.
C. Joint ownership hattpers a multinational company from carrying out specific manufacturing and marketing policies worldwide.
D. Global companies like Coca-Cola never need to engage in joint ventures to enter a market.
E. The profit potential for joint ventures is less than with licensing.

174 Part III - DEVELOPING MARKETING STRATEGIES - Chapter 12

p. 378 27. Which of the following entry strategies gives the company trying to gain an international marketing presence the most control?
A. indirect exporting
B. direct investment
C. direct exporting
D. franchising
E. licensing

p. 378 28. UPS built a $400 million Asia-Pacific distribution hub in Taiwan. This is an example of:
A. a joint venture
B. direct investment
C. contract service
D. franchising
E. licensing

p. 378 29. Which of the folloWing statements describes an advantage inherent in direct investment?
Direct investment reduces the amount of capital directly exposed to risk in a foreign country.
B. With direct investment, the firm can share control over the investment and thereby responsibility.
C. With direct investment, the investing company does not have to interact with government bureaucracy once the initial investment is made.
D. With direct investment, the firm assures itself access to the market in case the host country insists purchased goods have domestic content
E. Direct investment provides the investment company with a share of resources and fills in gaps the investing company may have in its resource pool.

p. 378 30. The process is term used to describe the evolution from exporting to direct investment.
A. globalization
B. internationalization
C. nationalization
D. multinationalization
E. glocalization

p. 379 31. Firms like Coca-Cola:, McDonald's, and Exxon that want to have the most consistent marketing worldwide will likely employ marketing mixes:
A. standardized
B. extended
C. centralized
D. adaptive
E. domestic

Designing Global Market Offerings 175

p. 379 32. The identical Black & Decker battery-powered drill that you buy at your local hardware store can be found in Great Britain and in any other country where Black & Decker products are sold. Black & Decker uses a strategy.
A. product adaptation
B. life-cycle
C. product innovation
D. straight extension
E. product expansion

p. 379 33. The first step in selecting a straight extension product strategy is to determine:
A. asset protection/investment recovery risk
B. operational profitability/cash-flow risk
C. whether the foreign consumers use the product
D. budget constraints
E. if any comparative advantage exists

p. 379 34. In Brazil, Levi-Strauss developed Femina brand jeans, which feature curvaceous cuts that provide the ultratight fit traditionally favored by Brazilian women. Levi-Strauss is using a strategy.
A. product adaptation
B. life-cycle -
C. product innovation
D. straight extension
E. product expansion -

p. 381 35: Introthicing a hand-powered washing machine to a third world country where many people currently washoclothes in a stream would be an example of:
A. reverse invention
B. forward invention
C. backward integration
D. vertical invention .
E. backward invention

p. 381 36. Which of the following strategies best illustrates the strategy of product invention?
A. A clock manufacturer reintroduces a wind-up clock for countries that have periodic power outages.
B. Campbell's soup introduces duck-gizzard soup into a Chinese province.
C. WD-40 lubricating oil learns people in certain countries use its product as an arthritis treatment.
D. Dunkin' Donuts uses smaller coffee cups in Japan where the individual's hand tends to be smaller than its American counterpart.
E. The Iranian Amusement Department introduces Sara, a Barbie look-alike clothes in modest Iranian costume.
Chapter 7 - Analyzing Business Markets and Business Buying Behavior
Multiple Choice Questions

1. The business market differs from the consumer market in that:
A. businesses acquire goods or services in order to use them for another purpose, while consumers acquire goods or services for personal consumption
B. businesses acquire all the goods or services for personal consumption, while the consumer market acquires goods and services solely for other purposes
C. it is a much larger market with many more buyers than the consumer market
D. it is a much smaller market in dollar volume than the consumer market
E. more product customization takes place in the consumer market
2. Organizational buying is:
A. the process by which organizations recognize their needs for goods and services
B. a way a company can product a greater. .variety of high-quality products at lower cost, in less time, with less labor
C. the decision-making process by which organizations establish and satisfy their needs for goods and services
D. the practice of establishing of strategic partnerships between manufacturers and their suppliers
E. the practice of buying a total solution for a problem from one seller
3. Business buying behavior differs from consumer buying behavior in that:
A. businesses buy products to accomplish a single goal, which varies by industry and business
B. the demand for products and services in the consumer market is unaffected by price fluctuations
C. fewer people typically participate in or influence busineSs buying decisions than in the consumer market
D. the buyers for the business market are typically more geographically dispersed than those for the. consumer market
E. the demand for business goods and services tends to be more volatile than the demand in the consumer market

p. 193 4. When compared to the consumer market, the demand for'goods and services in the
business market is:
A. far more elastic
B. significantly more constant
C. derived
D. inure likely to be affected by changes in price
E. all of the above

90 Part II - ANALYZING MARKETING OPPORTUNITIES - Chapter 7

In contrast to consumer markets, business markets have:
A. more buyers
B. more geographically dispersed buyers
C. more elastic demand
D. more volatile demand
E. more small buyers

Business buyers:
A. are geographically as diverse as consumers
B. tend to be geographically concentrated with over 1/2 of them in seven states
C. are largely concentrated in the southwestern U.S
D. tend to be found in smaller communities and rural areas in the Miaiest
E. use geographical dispersion to keep shipping costs low

Metallocene is a newly developed type of plastic used in making stretch films, liners, and pipes. It is more durable than any other form of sheet plastic on the market. The first year after the product was introduced its sales totaled $880 million. Analysts have predicted an annual growth of 30 percent as businesses like food producers discover how well Metallocene wraps and protects their products. Since the demand for Metallocene is dependent on the demand for the products wrapped in it, the demand for Metallocene is:
A. derived
B. inelastic
C. routine
D. elastic
E. constant

8. The purchasing agent for a hospital is informed the price of the hypodermic needles used in the hospital has increased by almost 20 percent. He orders a new supply anyway because he knows he can pass the increase on to his patients. This is an example of business products having demand.
A. routine
B. inelastic
C. volatile
D. accelerated
E. elastic

9. Anderson-Wilson manufactures collectible ceramic plates and figures. When the price of gold paint increased by 40 percent, it continued to order the same amount as it always had because while it needs to have the gold paint in stock, it is only used on a few items in its extensive product line. This is an example of demand.
A. routine
B. accelerated
C. volatile
D. constant
E. elastic

Analyzing BusinesS Markets and Business Buying Behavior 91

10. When a given percentage increase in consumer demand can lead to a much larger percentage increase in the demand for plant and equipment, the company is
experiencing:
A. the acceleration effect
B. inelastic demand
C. price skimming
D. the iceberg principle
E. price reciprocity

11. The zoo buys much of the fresh food it needs to feed its animals from a local farm. As a part of the contract between the two parties, the farm buys all the manure the zoo can produce for its organic vegetables. This is an example of
A. direct purchasing
B. relationship marketing
C. leasing
D. systems selling.
E. reciprocity

12. Leasing is common in business markets and permits businesses to: A. depredate their assets at a faster rate
B.. more easily engage in reciprocity
C. conserve capital
D. sell to institutional and government markets
E. eliminate the effect of inelastic demand on their markets

13. The most routine decision process undertaken by busineSs buyers is called a:
A. straight rebuy
B. modified rebuy
C. new task
D. routine rebuy
E. direct purchase

14. A new supplier is least likely to make a sale to a prospect involved in which of the following buyclasses?
A. straight rebuy
B. modified rebuy
C. functional rebuy
D. new task
E. direct purchase

15. Mikiato Tyler is the buyer for Sara Lee Meats. She is buying natural casings for making wieners, sausages, and other meat products. She orders the same number and
quality of casings as before but notices that her supplier's prices have increased slightly. Mikiato Tyler is conducting a:
A. straight rebuy
B. direct purchase
C. modified rebuy
D. new task buy
E. reciprocal buy

92 Part II - ANALYZING MARKETING OPPORTUNITIES - Chapter 7

16. Mikiato Tyler is the buyer for Sara Lee Meats. She is buying natural casings for making wieners, sausages, and other meat products. She orders the same number and quality of casings as before but notices that her supplier's prices have increased slightly. If prices from her usual supplier of casings continues to rise, you can expect Mikiato Tyler to engage in a:
A. straight rebuy
B. direct purchase
C. modified rebuy
D. new task buy
E. functional rebuy

17. Rogers Brothers, Inc. is a chicken processing plant. Its owners Ned and Pearson Rogers attended a trade show and saw a breast deboning machine that operates at a capacity of 900 birds per hour and requires only one employee. Until the show, the brothers had no idea such a product existed.. As far as they have learned only one company is manufacturing such a machine. They have calculated that such a machine could save them up to $200 a day in labor costs. They have contacted the company to learn more about the $67,000 deboning machine. The Rogers brothers are engaged in a:
A. straight rebuy
B. direct purchase
C. modified rebuy
D. new task buy
E. functional rebuy

p. 195 18. Mass media usually has its greatest impact at the stage of new-task buying.
A. awareness
B. interest
C. evaluation
D. trial
E. adoption

p. 195 19. Salespeople usually have their greatest impact at the
A. awareness
B. interest
C. trial
D. evaluation

E. adoption stage of new-task buying. 4

p. 196 20. Which of the following have the most influence in straight rebuy and modified rebuy situations in a multinational corporation?
A_ engineering department
B. production managers
C. administrative personnel
D. finance department
E. purchasing agents

Analyzing Business Markets and Business Buying Behavior 93

21. Engineering personnel would have the most influence when the organization is:
A. buying space for its booth at a national agricultural trade show
B. purchasing component parts for the farm equipment the organization manufactures
C. designing a display rack for its pamphlets on areas of interest to farmers
D. renewing its subscriptions to several trade journals
E. restocking its paint supply after repainting several offices

22. The owner of a sawmill is planning to purchase a $30,000 trailer for hauling wood chips to a distribution company where, the chips will be unloaded, packaged into 20-pound bags, and sold at gardening supply stores as mulch_ The operator of the distribution company would probably assume the roles of in the buying center.
A. user and gatekeeper
B. approver and influencer
C. initiator, gatekeeper, and decider
D. decider, user, and influencer
E. influencer andgatekeeper

23. With the help of the operations manager, the owner of Peerless Logistics is planning on buying a hydraulic roto-dumper for loading merchandise from hoppers into rail cars. It will be replacing an obsolete piece of equipMent which the operations
manager describes as hard to operate and potentially dangerous. In terms of the buying center, the operations manager who will be responsible for the overseeing the employee who operate and maintain the dumper has the roles of:
A. gatekeeper and decider
B. influencer, user, and approver
C. buyer, influencer, initiator, and gatekeeper
D. decider, user, and buyer
E. initiator, influencer, and decider

24. Interest rates, demand for products, technological change, social responsibility
concerns, and consumer buying patterns are all examples of influences on
business buyers.
A. environmental
B. interpersonal
C. organizational
D. entrepreneurial
E. individual

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94 Part II - ANALYZING MARKETING OPPORTUNITIES - Chapter 7

p. 198 25. Which of the following is an example of an organizational influence on a business buyer for a U.S. manufacturer of designer clothes?
A. The fashion houses in France have announced the colors for this season will be olive green and red.
B. OSHA is investigating why a worker lost his leg in an on-the-job accident.
C. New technology has devised a low-cost method of dying clothes thatiedicesiheir fading by 30 percent.
D. The company has issued new purchasing policies on the selection of zippers, buttons, and belt buckles.
E. More consumers are ignoring the fashion designers and making their own fashion decisions

p. 198 26. Which of the following is NOT an example of an organizational influence that might
affect the purchasing agent for a multinational conglomerate?
A. Many of the tasks formerly done by the purchasing agent are now being performed by a centralized purchasing department.
B. The conglomerate has adopted just-in-time production in two of its divisions.
C. The purchasing agent has a "want-the-best" attitude when its comes to buying component parts.
D. The organization is negotiating more long-term contracts than in previous years.
E. The company is doing much of its purchasing through the Internet.

27. Because Midi is new at her job as company buyer, she is very cautious in her buying decisions even when engaged in straight rebuys. influences have the greatest effect on Midi as she performs her job.
A. Environmental
B. Interpersonal
C. Organizational
D. Individual
E. Cultural

28. The linchpin of lean production is:
A. systems selling
B. just-in-time production
C. electronic data interchange
D. databases
E. derived demand

29. Which of the following is an example of commoditization?
A. The production department does not want its buyer to purchase any other brand of packing material but Westpack.
B. The furniture manufacturer uses three different brands of adhesives to ensure it will always have enough on hand.
C. The meat producer makes the manufacturers of plastic film compete for who gets its business.
D. Since the company has IBM computers, it must buy IBM compatible hardware.
E. The sugar manufacturer only cares about price when it buys sugar cane and will buy from any producer that has the lowest price.

Copyright © Prentice Hall. Ali Rights Reserved

Analyzing Business Markets and Business Buying Behavior 95

30. The purchase/procurement process begins with:
A. companies upgrading their departments with better qualified staff
B. someone recognizing a need that can be met by acquiring goods or services_
C. a general description of the need to be met through acquisition
D. the creation of product specifications
E. the selection of alternative suppliers for evaluation purposes

31. The gardener in charge of maintaining the beautiful grounds at an amusement park was strolling through the park looking at the flowers and bushes from a guest's perspective when he noticed some Japanese beetles flying around_ He made a mental note to himself that he had to order some Japanese beetle traps when he got back to
the office. This is an example of which of the steps in the purchase/procurement process?
A. problem recognition
B. general need description
C. product specification
D. supplier selection
E. supplier search

32. Which of the following buyphases would definitely be included in a modified rebuy situation?
A. problem recognition
B. general need description
C. supplier selection
D. supplier search
E. product specification

33. A product value analysis is conducted at the step of the procurement process.
A. problem recognition
B. general need description
C. product specification
D. supplier search
E. proposal solicitation

34. The routine placing of the monthly order to restock the office cabinet with staples, tape, paper clips, file folders, and labels definitely includes which of the following stages in the business buying process?
A. problem recognition
B. general need description
C. order-routine specification
A. supplier search
B. product specification
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96 Part II - ANALYZING MARKETING OPPORTUNITIES - Chapter 7

35. A retailer of gardening supplies was looking for some new store fixtures that would be durable, easy to clean, and portable. She attended the 1999 Store Fixturing Trade Show and asked several of her colleagues for recommendations. She is in the phase of business buying.
A. problem recognition
B. general need description
C. product specification
D. supplier search
E. order-routine specification

36. Bill sells store fixtures. He is talking to a buyer for a retail chain and trying to get a sense of her company's needs. Which of the following is an example of a good question for Bill to ask?
A. "What can I do to add value to your process?"
B. "What does your company do?"
C. "Who are you buying from now?"
D. "Can we do something for you?"
E. "Have you bought from my company before?"

37. When selecting a supplier, delivery reliability, price, and supplier reputation are most important for which type of product?
A. high-involvement
B. routine-order
C. procedural-problem
D. political-problem
E. functional order

38. When selecting a supplier, technical service, supplier flexibility, and product
reliability are most important for which type of product?
A. high-involvement
B. low-involvement
C. routine-order
D. procedural-problem
E. political-problem

39. For which type of products are price, supplier reliability, product reliability, service reliability, and supplier flexibility most important?
A. high-involvement B_ routine-order
C. low-involvement
D. procedural-problem
E. political-problem

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98 Part II - ANALYZING MARKETING OPPORTUNITIES - Chapter 7
p. 209
p. 209

p. 210 45. The institutional market is best described as having:
A. low budgets and a captive clientele
B. demand elasticity and geographically concentrated suppliers
C. contract negotiations and fluctuating demand
D. derived demand, geographically concentrated suppliers, and budgetary constraints
E. demand that is elastic, derived, and fluctuating

46. Suppliers describe governmental organizations as:
A. always selecting quality over price when buying products and/or services
B. avoiding opting for the bottom-line perspective
C. sometimes considering quality or reputation but primarily rewarding contracts on the basis of price -
D. requiring minimal paperwork and having a process open to public scrutiny
E. woefully lacking in specific guidelines for would-be suppliers

47 A negotiated bid is used in cases of:
A. international contracts with other governments
B. price being more important than quality
C. minority contractors providing the goods or services
D. large number of sellers offering the same product or service
E. complex projects involving major costs and risks

True-False Questions

p. 192 48. Marketers who cater to the business market should be even more in tune with their target markets than marketers: who cater to the consumer market.

p. 193 49. Demand for consumer goods is derived from demand for business goods.

p. 194 50. Reciprocity in the business market is illegal according to the Federal Trade Commission.
p. 196 51. A secretary who prevents salespersons from contacting users or deciders is playing an influencer role.
p. 197 52. Business marketers have little effect in stimulating total demand but may be effective in grasping more market share.
p. 198 53. With the recent trend toward team buying, purchasing departments and their managers face downgrading.
p. 198 54. Purchasing, while still highly decentralized in multi-division companies, is becoming more centralized.
p. 199 55. Interpersonal factors have almost no influence in business purchasing decisions.
p. 199 56. Lean production seems to combine the best of craft production and mass production.

Car. - ;71 7' 4`11 RighL Reserved

Analyzing Business Markets and Business Buying Behavior 97

40. The Knoll Textile Manufacturing Company is evaluating potential suppliers of zippers to be used in production of a line of children's outerwear. The company is concerned about the delivery reliability, price, and supplier reputation. Knoll is in the phase of the business buying process.

A. supplier selection
B. proposal solicitation
C. product specification
D. performance review
E. order-routine specification

41. The Christmas Village store sells Christmas decorations year-round. The primary source for its domestic and foreign ornaments is Holiday Creations, but the Christmas Village also buys some ornaments from ANM Importers and Kris-Kros Distributors. Both of the distributors continue to try to price their merchandise at prices lower than those of Holiday Creations because ANM Importers and Kris-Kros Distributors are both:
A. outsuppliers
B. outsourcing agents
C. second-tier suppliers
D. value-added suppliers
E. subordinate suppliers

42. As Rick and the salesperson talked, they agreed Rick would buy four cases of hanging baskets, six six-foot sections of metal shelving, and two rolls of poly film for Rick's gardening supply store. In addition, the salesperson agreed to have the items delivered in two weeks and give Rick a ten-percent discount. Rick and the salesperson are engaged in which phase of the procurement process?
A. supplier selection
B. proposal solicitation
C. product specification
D. performance review
E. order-routine specification

43. A blanket purchase contract leads to:
A. buyers being less dependent upon any given supplier
B. the rcbuy process being upgraded to a new task buy each time there's a reorder.
C. the supplier maintaining the inventory
D. systems selling
E. multiple sourcing

44. A company can review the performance of a supplier by:
A. using a buyflow map
B. developing a supplier-attribute positioning map
C. using financial data from Dun and Bradstreet
D. aggregating the cost of poor performance to come up with an adjusted cost of purchase, including price
E. using any of the above methods