Test 944A BUYING AND MERCHANDISING 9
1. The first step in developing a valid contract involves
A. negotiating a price. C. making an offer.
B. selling a product. D. setting a deadline.
2. Which of the following is a question that the Americans with Disabilities Act prohibits retailers from asking potential employees:
A. What type of training do you have? C. Can you work the required hours?
B. What prescription drugs do you take? D. Can you perform the job functions?
3. Which of the following is considered a stock-handling function:
A. Balancing the register C. Preparing statements
B. Making change D. Sorting merchandise
4. Information technology has dramatically improved supply-chain management capability by creating a seamless distribution process for matching
A. costs with expenses.
B. inventory needs to distribution centers.
C. inventory needs to customer requirements.
D. customer requirements with product innovation.
5. Making sure that sufficient quantities of merchandise are available when they are advertised is one reason why retailers coordinate distribution with the marketing function of
A. storage. C. packaging.
B. promotion. D. selling.
6. Which of the following is the best example of negative horizontal conflict among members in a distribution channel:
A. An automobile manufacturer provides its authorized dealers with rebate programs.
B. A restaurant franchisee uses unauthorized food suppliers that compromise brand integrity.
C. A retail business awards a construction contract to the company with the lowest bid.
D. A new electronics manufacturer engages in direct distribution strategies.
7. Which of the following is a factor that a department store buyer should consider when selecting a channel of distribution:
A. Type of product C. Credit policy
B. Return process D. Size of sales force
8. One of the advantages of rehearsing an oral presentation is that it gives the merchandising manager the opportunity to
A. prepare attractive visuals. C. organize new information.
B. time the presentation. D. anticipate questions.
9. When participating in staff meetings, merchandising department employees should be prepared to
A. remain silent. C. comment on every detail.
B. join in the discussion. D. argue.
10. When giving assistant buyers directions for completing job tasks, it may be necessary for managers to include
A. definitions of terms. C. group discussions.
B. a time for brainstorming. D. a list of participants.
11. A customer asks a salesperson about a specific advertisement in last Sunday's newspaper. Which of the following would help the salesperson to assist the customer:
A. Knowledge of the store's promotional budget
B. Knowledge of the products being promoted
C. Knowledge of the store's policies
D. Knowledge of the customer's preferences
12. How can purchasing agents or buyers benefit from an efficient receiving process?
A. They enjoy easy access to the receiving area since its doors are open throughout the day.
B. They are able to read price stickers to determine a product's weight and price.
C. They learn the appropriate way to handle fragile goods when they arrive at the business.
D. They can find out what goods are on back order and when they will be delivered.
13. The supplier did not have the exact items the business ordered and shipped substitutions. The receiving clerk reported to the buyer that there was a(n) ______in the shipment.
A. shortage C. discrepancy
B. overage D. purchase order
14. What information does a unit inventory control system provide a gift shop?
A. Projected profit or loss C. Value of goods in stock
B. Estimate of future sales D. Quantity of goods on order
15. Retailers calculate unit inventory shrinkage by subtracting the periodic stock count from the
A. previous stock count. C. units purchased.
B. net sales transactions. D. perpetual inventory.
16. What does a store determine after it completes a physical count of its inventory?
A. Total retail value of the inventory C. Total value of the back stock
B. Total profit of the business D. Total retail value of a few departments
17. Is a computer a consumer good?
A. Yes, it can be used to satisfy personal wants. C. No, it is an industrial good.
B. Cannot be answered with information given D. Yes, it can be used in operating a business.
18. One reason why the supply of certain products has been eliminated is because of
A. production methods. C. technology.
B. government regulations. D. elasticity.
19. Which business activity is responsible for most of the decision making that takes place within the merchandising business?
A. Management C. Marketing
B. Collective bargaining D. Physical distribution
20. Which of the following regulatory agencies would be concerned with price fixing and unfair competitive practices:
A. Federal Trade Commission C. National Labor Relations Board
B. Consumer Product Safety Commission D. Federal Communications Commission
21. A new retailer that purchases insurance for its fleet of delivery trucks is handling risk by ______it.
A. transferring C. controlling
B. retaining D. avoiding
22. What organization helps union locals to become established, recruit new members, and negotiate with management?
A. Shop stewards C. National union
B. Federal government D. National Labor Relations Board
23. Consumers' purchasing power usually increases as a result of a decrease in
A. inflation. C. spending.
B. employment. D. productivity.
24. One reason why the owner of a hardware store might become concerned when the store's closest competitor begins selling a line of imported tools from the Far East is because
A. labor is cheap in the Far East, so products can be sold inexpensively.
B. trade restrictions will increase the availability of imported products.
C. the owner believes that most customers are committed to "buying locally."
D. the store was planning to introduce some new high-tech tools from Germany.
25. Buying and merchandising employees who are able to deal with new situations and changes in the workplace are demonstrating
A. leadership. C. responsibility.
B. adaptability. D. enthusiasm.
26. Merchandise buyers who develop effective political relationships within an organization usually are able to
A. earn compensation. C. obtain power.
B. eliminate conflict. D. overcome stress.
27. When coworkers disagree about the best way to solve a problem, they are involved in ______conflict.
A. intangible C. functional
B. emotional D. specific
28. Which of the following should a head buyer create in order to encourage team building:
A. Climate of trust C. Sense of control
B. Line of authority D. Resistance to change
29. Which of the following is a cost of credit:
A. Rebates C. Fidelity bonds
B. Discounts D. Finance charges
30. Which of the following helps individuals select the type of life insurance to buy and the most appropriate investments:
A. Local bank managers C. Trust departments
B. Certified public accountants D. Financial planners
31. A retailer's statement of financial requirements, profit-and-loss statement, cash flow analysis, break-even analysis, and balance sheet serve as important tools for reducing risk by providing
A. ways of transferring risks to others. C. figures needed for income tax reports.
B. data needed for the business plan. D. advance estimates of financial needs.
32. Accounting standards are necessary in business because
A. the government wants to know what businesses are doing.
B. auditors need a way to evaluate businesses.
C. important decisions rely on accounting information.
D. math scores have dropped in recent years.
33. Which of the following is an external factor that retail merchandisers should consider when forecasting sales:
A. Competitors C. Management
B. Operations D. Distribution
34. Calculate the net profit or loss for a retailer if its financial statements indicate it has a total income of $69,600 for the year and operating expenses for the year totaling $70,000.
A. $600 loss C. $400 loss
B. $400 profit D. $600 profit
35. Most employers require applicants to complete
A. letters of application. C. resumes.
B. application forms. D. reference checks.
36. The type of training that is especially useful for explaining theory or reasons for a specific operation to a few buyers or to the entire merchandising department is known as
A. internships. C. group training.
B. outside courses. D. on-the-job training.
37. Susie's boss at a large department store told her that she wouldn't get a good review unless she goes out with him. Susie has never had or shown any interest in her boss, but she didn't want to lose her job as assistant buyer. What kind of situation is this?
A. Sexual harassment C. Standard office procedure
B. Management's commitment to equity D. Affirmative action
38. Which of the following is a type of external marketing information that helps merchandisers make decisions:
A. Demographic trends C. Customer databases
B. Purchasing records D. Sales predictions
39. The search capabilities of the Internet allow businesses to locate large amounts of specific information about vendors and merchandise in a matter of seconds and
A. create targeted questionnaires. C. analyze the value of the data.
B. download the data for future use. D. protect the privacy of the web site.
40. What is one reason why merchandising businesses evaluate the performance of their marketing plans?
A. To position products C. To identify problems
B. To develop objectives D. To segment customers
41. Businesses that gather marketing information from scanners that record what customers buy are using a research method called
A. observation. C. sampling.
B. exploration. D. survey.
42. Marketing begins with what activity?
A. Distributing C. Promoting
B. Pricing D. Planning
43. Which of the following is a question that the marketing-information management function can help retailers answer:
A. Where will products be stored? C. What is the image of the business?
B. What new products should be developed? D. Where are customers located?
44. Which of the following are infrastructure factors that make international trade more challenging than doing business at home:
A. Many well-trained individuals in the labor force
B. Favorable exchange rate
C. Unreliable telephone service and inadequate roads
D. High standard of living
45. When marketers sort customers psychographically, they divide them by
A. lifestyle habits. C. likable traits.
B. loyalty to a brand. D. level of education.
46. Why is it important for a retailer to select a target market?
A. To prepare detailed promotional reports
B. To identify the most appropriate vendors
C. To develop strategies to appeal to customers
D. To organize exclusive buying departments
47. An important part of a retailer's overall business plan is the ______plan.
A. marketing C. emergency
B. credit D. training
48. One of the main reasons why a retailer conducts a market analysis is to
A. conduct experiments. C. identify samples.
B. forecast sales. D. observe consumers.
49. If a store discovers a competitor's weakness when it is conducting a competitive analysis, the store has often uncovered a(n)
A. ethical disadvantage. C. marketplace opportunity.
B. internal threat. D. product liability.
50. A company's sales forecast is an estimate for a given period of time of what its ______will be.
A. market potential C. sales expenses
B. sales quotas D. total sales
51. An advantage in developing an effective marketing plan is that it helps a retailer to
A. monitor its performance. C. develop operating procedures.
B. identify fixed assets. D. increase its competitors' demand.
52. Businesses maintain information about inventory levels, the types of products that customers are buying, and the reasons for any returns in order to
A. update promotional materials. C. develop display ideas.
B. contact new vendors. D. make marketing decisions.
53. Retailers conduct marketing audits at regular intervals because the retailers operate in a(n) ______environment.
A. unpredictable C. exclusive
B. consistent D. inactive
54. The technology that has impacted retail merchandising the most in the last decade is ______technology.
A. research C. information
B. transportation/logistics D. telephone shopping/ordering
55. When conducting an environmental scan, which of the following is an economic factor that a retail merchandiser should consider:
A. Consumer spending habits C. Local demographics
B. Global trade regulations D. Restricted sales territories
56. When a customer is injured in an accident at a local store, employees should try to
A. examine the injured customer. C. determine the severity of the injury.
B. move the customer to a comfortable area. D. keep the incident to themselves.
57. What type of security problem is most frightening to a store's employees?
A. Robbery C. Burglary
B. Fraud D. Shoplifting
58. The process of providing a service and/or making a good is called
A. business. C. production.
B. marketing. D. financing.
59. Buyers and merchandising department employees who never take company supplies or equipment, such as pens or tools, for their own use help the business to
A. increase profits. C. control shoplifting.
B. control expenses. D. reduce external theft.
60. Buyers should order only the amount of operating supplies that they have room to
A. store. C. sell.
B. display. D. market.
61. A basic function of business maintenance is
A. purchase of merchandise. C. control of inventory.
B. repair of the store's equipment. D. construction of displays.
62. What should cashiers remove from the cash drawer during the process of closing out the register?
A. Daily change fund C. Sales commission
B. Merchandise credit D. State sales tax
63. Andy was interviewed for a job opening that he heard about from one of his teachers. Which of the following is the most appropriate action for Andy to take after the job interview:
A. Send a letter to the teacher
B. Send a letter to the business
C. Send a letter to the business and one to the teacher
D. Send a letter to the business and to the teacher if he's hired
64. A merchandising department manager reviewed each of a new employee's job duties with the employee and gave the new worker a company handbook. What time-management technique has been demonstrated?
A. Avoiding procrastination C. Communicating effectively
B. Building in planning time D. Combining tasks
65. Which of the following is an objective of profit-oriented pricing:
A. Being competitive C. Gaining a return on investment
B. Increasing market share D. Creating an image for the business
66. Which of the following is an appropriate selling price for a product with total costs of $10.00 and a gross margin of $5.00: