Question

Fleetroot Travels provides charters for private-group travel to exotic destinations. The company's aircraft and ships operate around the world. Fleetroot's marketing department determines the pricing of tours and charter rates and is responsible for all advertising. It also forecasts future demand, and Fleetroot's operating units rely on these forecasts to make strategic decisions about capacity creation. The marketing department is best regarded as a(n) _____ center.

A. cost
B. profit
C. investment
D. market responsibility

Answer 1

Fleetroot's marketing department, which sets pricing, advertises, and forecasts demand, is a market responsibility center, focusing on market operations rather than direct profit or investment responsibilities. The correct option is D. market responsibility

Step-by-step explanation:

The marketing department in Fleetroot Travels, which is responsible for determining the pricing of tours and charter rates, advertising, and forecasting future demand, is best regarded as a market responsibility center. This department directly influences revenues through marketing and sales initiatives and indirectly influences expenses related to promotional activities. A market responsibility center is distinct from a cost center, profit center, or investment center as it specializes in market operations, such as generating sales and expanding market share, without having direct responsibility for profitability or investment decisions. Therefore, option D, market responsibility, is the appropriate classification for Fleetroot's marketing department.

The correct option is D. market responsibility