Final answer:
The statement that only a firm's purchasing department makes all distribution and transportation decisions is false. Marketing plays a critical role in these areas as part of a firm's overall strategy in a market-oriented economy.
Step-by-step explanation:
Marketing involves not only the development and promotion of a firm's products but also plays a role in the decisions relating to distribution and transportation. However, the claim that the purchasing department alone makes all decisions regarding distribution and transportation is false. Marketing strategies often encompass decisions about how products are distributed and how they reach consumers. Elements such as product positioning, market segmentation, and the overall marketing mix—including place or distribution strategies—are critical components of a comprehensive marketing plan.
In a market-oriented economy, firms have the freedom to make various decisions, including expanding or reducing production, setting prices, opening or closing facilities, hiring or laying off workers, starting or discontinuing products, and pursuing mergers or acquisitions. Marketing departments, therefore, collaborate with other departments to align these decisions with the organization's strategic objectives. This integrated approach ensures that the firm can attract more customers and produce more efficiently.