Question

1-Variable costs are defined as costs that

Multiple Choice

• change only during economic downturns.

• vary depending on the number of units produced or sold.

• vary depending on the advertising budget for the product.

• vary depending on the type of material used in production.

• remain constant even though the product offering varies.

2-Airbnb and Flipboard coming together for providing a new offering is an example of:

Multiple Choice

• Brand revitalization

• Brand equity

• Co-branding

• Brand extension

3-A push supply chain strategy involves:

Multiple Choice

• Adapting to changing demand patterns, as opposed to depending on sales forecasts

• Minimizing inventory costs

• Manufacturing products and moving them through the supply chain using various trade promotions and other channel incentives

• Producing a limited number of products to reduce high inventory costs

Answer 1

1. Vary depending on the number of units produced or sold

By definition, variable costs vary as per the production output i.e. a number of units produced or sold. This explanation disproves all other options.

2. Cobranding

Airbnb and Flipboard are two different brands united together for giving extended services to the customers. Airbnb is looking for the advertisement of their new services, while Flipboard was indeed looking to create meaningful content for current customers and also searching for a new target audience. They both are doing cobranding. Cobranding is the branding partnership established by two companies for mutual benefit. This explanation disproves all other options.

3. Adapting to changing demand patterns, as opposed to depending on sales forecasts

In push supply chain category the demand forecast influences the change in the production process. This explanation aligns with the stated option, so it is the right to answer. This disproves all the other options.

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