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Supply Chain

The connected chain of all business entities, both internal and external, that perform or support the logistics function.

Supply Chain Management

A system that coordinates and integrates all activities performed by supply chain members into a seamless process, enhancing customer and economic value.

Supply Chain Agility

An operational strategy focused on creating inventory velocity and operational flexibility simultaneously in the supply chain.

Supply Chain Orientation

A system of management practices consistent with a 'systems thinking' approach.

Supply Chain Integration

When multiple firms or business functions coordinate their activities and processes to satisfy the customer seamlessly.

Demand-Supply Integration (DSI)

A supply chain operational philosophy focused on integrating supply-management and demand-generating functions.

Business Processes

Bundles of interconnected activities that stretch across firms in the supply chain.

Customer Relationship Management (CRM)

A process that prioritizes marketing focus on different customer groups according to their long-term value.

Customer Service Management

A process that presents a unified response system to customers' complaints, concerns, and questions.

Demand Management

A process that aligns supply and demand by anticipating customer requirements and creating related plans.

Order Fulfillment

A highly integrated process requiring collaboration from multiple companies to satisfy customer needs.

Order Cycle Time

The time delay between placement of a customer's order and the receipt of that order.

Manufacturing Flow Management

A process ensuring that firms have the resources to manufacture and move products flexibly through production.

Supplier Relationship Management

A process that supports manufacturing flow by maintaining relationships with valued suppliers.

Product Development and Commercialization

Activities facilitating joint development and marketing of new offerings among supply chain partners.

Returns Management

A process that enables firms to manage returned products efficiently while maximizing value.

Sustainable Supply Chain Management

A philosophy that optimizes social and environmental costs in addition to financial costs.

Outsourcing

Use of an independent third party to manage an entire function of a logistics system.

Third-Party Logistics Company (3PL)

A firm that provides functional logistics services to others.

Fourth-Party Logistics Company (4PL)

A consulting-based organization providing integrated logistical solutions.

Offshoring

The outsourcing of a business process from one country to another for economic advantage.

Nearshoring

The transfer of offshored activity from a distant to a nearby country.

Public-Private Partnerships (PPPs)

Collaborative agreements to address large-scale problems for both company and societal interests.

Electronic Distribution

A technique involving any product or service that can be distributed electronically.

Three-Dimensional Printing (3DP)

The creation of objects using additive manufacturing technology.

Big Data

Large-scale datasets that exceed current analytical capabilities.

Cloud Computing

The practice of using remote servers for storing, managing, and processing data.

Supply Chain Analytics

Data analyses that enhance design and management of the supply chain.

Marketing Channel

A set of interdependent organizations easing the transfer of ownership as products move from producer to consumer.

Channel Members

All parties in the marketing channel who negotiate and facilitate the product change of ownership.

Form Utility

Elements of a product's composition and appearance that make it desirable.

Time Utility

Customer satisfaction gained by making a product available at the appropriate time.

Place Utility

Usefulness of a good based on its location availability.

Exchange Utility

Increased value of a product during the transfer of ownership.

Merchant Wholesaler

An institution buying goods from manufacturers to resell to businesses or other retailers.

Agents and Brokers

Wholesaling intermediaries who facilitate sales without taking title to a product.

Retailer

A channel intermediary that sells mainly to consumers.

Direct Channel

A distribution channel where producers sell directly to consumers.

Dual Distribution

Using two or more channels to distribute the same product to different markets.

Nontraditional Channels

Channels that facilitate unique market access for products and services.

Strategic Channel Alliance

A cooperative agreement between firms to use each other's distribution channels.

Gray Marketing Channels

Unintended secondary channels that often flow illegally obtained products.

Reverse Channels

Channels enabling customers to return products or components for reuse.

Drop and Shop

A system allowing customers to return used products at store entrances.

Digital Channels

Electronic pathways allowing flow of products and information from producer to consumer.

M-commerce

The ability to conduct commerce using mobile devices.

Intensive Distribution

Distribution aimed at having a product available in every outlet where target customers might buy.

Selective Distribution

Distribution achieved by screening dealers to retain only a few in any area.

Exclusive Distribution

Distribution that establishes one or a few dealers within a given area.

What is price?

Money that someone has to give to buy a product.

What is barter?

A transaction where no money is exchanged.

Why is price important to marketers?

It generates revenue, quantifies value, is dynamic, and is influenced by competition.

What is the equation for price?

(Total Cost + Profit) / Quantity → (TC + P) / Q

What is the equation for profit?

(Price × Quantity) - Total Cost → (P × Q) - TC

Define revenue, cost, and profit.

Revenue = P × Q; Cost = TC; Profit = Revenue - TC.

What are the types of cost concepts?

Total cost = Fixed cost + Variable cost.

What are examples of fixed and variable costs?

Fixed costs: Rent; Variable costs: Utilities.

What do AFC, AVC, and ATC stand for?

Average Fixed Cost, Average Variable Cost, and Average Total Cost.

What is marginal cost?

The cost of producing one more unit of a product.

What is breakeven analysis?

Identifies the quantity where a company makes no profit or loss.

How do you calculate the breakeven point?

FC / (Unit Price – Unit Variable Cost)

What is a demand curve?

A graph showing the relationship between price and quantity demanded.

How does price relate to demand for prestige products?

Higher price can increase quantity demanded due to symbolic value.

What is price elasticity of demand?

% Change in Quantity Demanded / % Change in Price.

What does it mean if elasticity (E) > 1?

The product is elastic; substitutes are available.

What does it mean if elasticity (E) < 1?

The product is inelastic; few or no substitutes.

Name the 4 pricing approaches.

Cost-oriented, Demand-oriented, Profit-oriented, Competition-oriented.

What is skimming pricing?

Setting a high initial price and lowering it over time to reach new customer layers.

What is penetration pricing?

Setting a low initial price to quickly gain market share.

What is prestige pricing?

Charging more to create a sense of luxury and exclusivity.

What is target pricing?

Setting price based on what customers are willing to pay, then calculating costs.

What is bundle pricing?

Selling multiple products together at a lower combined price.

What is odd-even pricing?

Pricing items slightly below a whole number (e.g., $4.99).

What is yield management pricing?

Adjusting prices based on consumer behavior to maximize revenue.

What is standard markup pricing?

Adding a set percentage to the cost to determine selling price.

What is cost-plus percentage of cost pricing?

Adding a fixed percentage to the total production cost.

What is cost-plus fixed fee pricing?

A set fee is added, regardless of the actual costs.

What is experience curve pricing?

Lowering prices based on cost savings from increased production experience.

What is target profit pricing?

Setting price to achieve a specific profit (TR - TC).

What is target return-on-sales pricing?

Target profit pricing divided by total revenue (TR).

What is customary pricing?

Setting prices based on tradition or customer expectations.

What is above, at, or below market pricing?

Setting prices relative to competitors’ pricing.

What is loss-leader pricing?

Pricing a product below cost to attract customers to other products.

Why are pricing decisions important to the economy and firms?

Pricing allocates resources and generates essential revenue for business growth.

What are the three main types of pricing objectives?

Profit-oriented, Sales-oriented, and Status Quo.

How does demand impact price?

Demand determines how much consumers are willing to pay, affecting pricing strategies.

What is dynamic pricing?

Adjusting prices in real-time based on market demand.

What is a yield management system?

Software that maximizes revenue from a limited resource by adjusting prices.

What influences price across the product life cycle?

Competition, distribution, promotions, customer demand, internet pricing transparency, and perceived quality.

What are the four major legal constraints on pricing?

Unfair trade practices, price fixing, price discrimination, and predatory pricing.

What are examples of fine-tuning price tactics?

Discounts, allowances, rebates, geographic pricing, and value-based pricing.

price

that which is given up in an exchange to acquire a good or service

revenue

the price charged to customers multiplied by the number of units sold

profit

revenue minus expenses

return on investment (ROI)

net profit after taxes divided by total assets

market share

a company’s product sales as a percentage of total sales for that industry

status quo pricing

a pricing objective that maintains existing prices or meets the competition’s prices

demand

the quantity of a product that will be sold in the market at various prices for a specified period

supply

the quantity of a product that will be offered to the market by a supplier at various prices for a specified period

elasticity of demand

consumers’ responsiveness or sensitivity to changes in price