12. A company's distribution and warehouse expenses do NOT include which one of the following?

a. The inventory costs of carrying unsold pairs over from the prior year ($0.50 per pair on required inventrory and $1 per pair on additional unsold pairs)

b. Annual leasing and maintenance fees of $1 million for each of the company's four distribution centers; however, such expenses fall to 5 times the number of pairs sold when warehouse volume in any region is less than 200,000 pairs annually (should company managers decide to abandon selling footwear in a geographic region, leasing and maintenance costs will fall to $0--but annual leasing and maintenance fees will resume if/when sales in the region begin again)

c. A standard import tariff of $4.00 per pair on all pairs imported from the company's foreign production facilities

d. Per pair freight costs on incoming shipments of newly-produced footwear from one or more of the company's production facilities

e. The costs of processing, boxing, packaging, handling, and shipping orders to footwear retailers and online buyers

13. Which of the following most accurately describes your company's production operations?

a. Branded footwear is typically produced 2 shifts per day, 5 days per week; private-label footwear is normally produced using only 1 shift per day (at night and sometimes on weekends when needed).

b. Currently, your company's North American production facility has sufficient space to install enough additional new or refurbished footwear-making equipment to boost production capacity by 3 million pairs without use of overtime.

c. Standard and superior materials are sourced from outside suppliers at "base" prices that are currently $6 per pair for 100% use of standard materials and $12 per pair for 100% use of superior materials; however, these base prices can vary up or down according to the strength of global demand for footwear materials and the global percentage usage of standard versus superior materials.

d. Currently, your company's production facility in the Asia-Pacific region has sufficient space to install enough additional footwear-making equipment to boost production capacity by 1 million pairs without use of overtime; however, because this facility is able to operate only with older, refurbished equipment, all additional purchases of footwear equipment for the facility must always be refurbished equipment rather than new state-of-the-art equipment.

e. TQM/Six Sigma quality control programs are used to reduce reject rates while best practices training is used to increase S/Q ratings and the number of different models that can be produced each week.

14. Which of the following statements about the importance of each competitive factor in determining company-to-company differences in branded sales volumes and market shares in a particular geographic region is false?

a. Tiny cross-company differences in competitive effort on a highly influential competitive factor (like S/Q ratings, the number of models/styles offered, and selling prices) nearly always have a far bigger impact on company sales/market share outcomes in a region than do large cross-company differences in competitive effort on less influential competitive factors.

b. As the spread between the company with the region's strongest competitive effort on a given competitive factor and the company with the region's weakest competitive effort becomes greater and greater, the stronger is the resulting impact of that competitive factor on the pairs sold/market share outcomes of the various companies.

c. When a companys competitive effort on each of the relevant competitive factors in the wholesale or internet market segments for branded footwear approximates the all-company averages in a region, then its resulting unit sales volume/market share in those two segments will also approximate the regions all-company sales/market share averages.

d. The closer to the all-company regional average is a companys price or S/Q rating or brand reputation or number of models (and so on) the smaller is the weighting/impact of that factor in accounting for why that companys regional unit sales/market share is above/below the regions all-company unit sales/market share averages

e. Big S/Q rating differences, big average wholesale price differences, and big differences in the number of models/styles offered in a region weigh heavily in accounting for company-to-company differences in branded pairs sold and market share in all four regions.