DECA Hospitality and Tourism Cluster Practice Exam

What does B.F. Goodrich shipping tires directly to General Motors illustrate?

1. Intermediary channel of distribution.

2. Indirect channel of distribution.

3. Intensive channel of distribution.

4. Direct channel of distribution.

The correct answer is: Direct channel of distribution.

The scenario of B.F. Goodrich shipping tires directly to General Motors exemplifies a direct channel of distribution. In this system, the producer (B.F. Goodrich) ships products directly to the end user (General Motors) without any intermediaries such as wholesalers or retailers. This direct interaction allows for greater control over the distribution process, potentially reducing costs and lead times associated with additional handling. This direct relationship can also foster stronger collaboration and communication between the manufacturer and the buyer, enhancing the fulfillment of specific requirements or specifications for the tires. By eliminating middlemen, it can streamline logistics, increase efficiency, and potentially lead to more customized service, which is particularly important in manufacturing supply chains. The other options involve varying degrees of intermediary involvement, which are not present in this direct shipping scenario. The core of the example is the direct transactional relationship that facilitates a more efficient supply chain between B.F. Goodrich and General Motors.