An order taker at a producer of bed linens receives an order from a retailer for 6,500 pillows to be shipped to the retailer’s warehouse. The retailer will pay for shipping. Which channel member is most likely to set requirements for routing?
A. The wholesaler B. The producer C. The consumer D. The retaile
The Correct Answer and Explanation is:
Correct Answer: D. The retailer
Explanation:
In this scenario, the order taker is working for a producer of bed linens and has received an order from a retailer for 6,500 pillows. It’s specifically mentioned that the retailer will pay for shipping. Because the retailer is responsible for the cost of shipping, they typically hold the authority to determine the routing requirements — such as the shipping method, carrier, and delivery schedule.
This kind of control over routing decisions is standard in logistics when the buyer is paying for transportation. Since they are incurring the cost, they have the incentive to ensure that the shipment aligns with their logistical preferences (e.g., cost-efficiency, speed, reliability). Therefore, the retailer is most likely to set the routing instructions.
Let’s examine the other options:
- A. The wholesaler: A wholesaler might set routing requirements if they were involved in the transaction, but in this scenario, there’s no indication that a wholesaler is part of the supply chain. The transaction is directly between the producer and the retailer.
- B. The producer: Producers often determine routing when they are responsible for shipping costs (FOB destination). However, in this case, the retailer is paying for shipping, so the producer would not be the decision-maker for routing.
- C. The consumer: Consumers rarely have any role in large-scale logistics decisions like routing, especially in a business-to-business (B2B) transaction between a retailer and a producer.
Conclusion:
Since the retailer is paying for shipping, they have the right and responsibility to specify how the goods should be transported, making them the most likely channel member to set routing requirements. Hence, the correct answer is D. The retailer.