2009 DECA Ontario Provincials Competition BMDM
Test 999A BUYING AND MERCHANDISING 1
1.In a contract, what one party gives or receives in exchange for something else is an example of
A.consideration. C.compensation.
B.agreement. D.acceptance.
2.Which of the following is the connecting link between producers and consumers:
A.Transportation C.Management
B.Change agents D.Distribution
3.Which of the following factors helps determine if a manufacturer is illegally using closed sales territories for distribution purposes:
A.Reduced competition C.Perishable goods
B.Increased intensity D.Limited risk
4.To minimize conflict among distribution channel members, channel relationships should be viewed as
A.friendly rivalries. C.employees.
B.partnerships. D.non-binding contracts.
5.What level of intensity would be used by a manufacturer of Rolex watches to determine how widely the watches will be distributed?
A.Selective distribution C.Intensive distribution
B.Exclusive distributionD.Order processing
6.Which of the following is a reason why it is important for businesses to regularly evaluate channel members and make modifications:
A.Product life cycle is changing.C.Market share is consistent.
B.Distribution system is effective.D.Legal assistance is necessary.
7.One reason why assistant buyers often write proposals for management is to
A.provide information. C.explain grievances.
B.obtain promotions. D.analyze progress.
8.An effective technique that merchandising businesses can use to foster positive customer relations is instructing employees to react to customers with
A.pleasant courtesy.C.witty remarks.
B.broad knowledge. D.immediate service.
9.Stan, a new employee, offered free gift wrap to a friend who was purchasing an item, but told another customer purchasing the same item that there was a charge for gift wrap. Stan failed to follow the company's policy that was intended to ensure
A.fair treatment of customers. C.smooth business operations.
B.satisfactory levels of profits. D.equal evaluation of employees.
10.Which of the following is not a major category of customer complaints:
A.BillingC.Service
B.Merchandise D.Hours
11.One of the advantages of using an electronic business system to facilitate order fulfillment is that it helps companies to
A.search the Internet for low prices.C.develop online auction sites.
B.receive feedback from customers.D.meet customers' delivery dates.
12.A merchandise planning decision that involves how much merchandise to place on the selling floor, how much to place in a stockroom, and whether to use a warehouse is concerned with the ______of merchandise.
A.storingC.receiving
B.distribution D.shipping
13.Which of the following would most likely be the cause of an inventory overage:
A.Lost or incorrect price ticketsC.Faulty record-keeping procedures
B.Theft by customers and/or employeesD.Unrecorded breakage and spoilage
14.A store maintains a list of items that the business always keeps in stock. What type of unit control plan is the store using?
A.In-stock listC.Model stock plan
B.Basic stock list D.Never-out list
15.Retailers often collect information from each sales check about the items purchased in order to maintain accurate
A.credit files on customers.C.files on economic incentives.
B.unit inventory control records.D.records to comply with federal law.
16.When analyzing its shipping needs, what type of carrier might a vendor decide to use if it wanted to cost-effectively ship small orders to retailers?
A.Express delivery C.Private courier
B.Freight forwarder D.Airborne service
17.What might businesses do if they expect prices to increase substantially in the future?
A.Encourage consumers to buy. C.Ship more products to stores.
B.Increase production now. D.Keep products off the market.
18.How do societies that specialize in producing certain goods obtain the other goods that they need?
A.Competition C.Rationing
B.Exchange D.Distribution
19.Economies of scale are characteristics that allow a business to increase output without experiencing a comparable increase in the
A.level of profit. C.rate of interest.
B.cost of production. D.type of input.
20.What is one way that fluctuating interest rates might have a negative impact on the economy?
A.Encourage the use of credit C.Increase more consumer spending
B.Decrease the cost of doing business D.Prevent businesses from investing
21.At the end of the 1990s, in the United States interest rates fell, consumers began buying new and bigger homes, and businesses were investing more money in capital goods. This period of time in a business cycle is known as
A.trough.C.expansion.
B.contraction. D.peak.
22.What factor has caused retailers to enter the global market?
A.Company's intent to establish its operations in several countries
B.Concept of self-service and the supermarket
C.International flow of retailing concepts or know-how
D.Improved transportation and communications systems
23.Retailers' purchasing departments often build teams to solve problems, which involves giving ______to the team.
A.leadership C.insight
B.compensation D.authority
24.A plaque that a purchasing department gives a buyer for doing an outstanding job is an example of a
A.compliment. C.reward.
B.recognition. D.benefit.
25.An employee who develops respectful, informal relationships with coworkers and managers often increases his/her leverage when s/he wants to ______at work.
A.gossip about others C.initiate positive changes
B.make another employee look bad D.create unpredictable circumstances
26.An arrangement that allows customers to purchase and use merchandise and pay for it at a future time is referred to as a ______sale.
A.cashC.credit
B.budget D.layaway
27.When customers buy on credit, the money owed the business by the customers is part of the business's
A.current liabilities. C.accounts payable.
B.accounts receivable. D.cash receipts.
28.When preparing a cash flow statement, calculate a merchandising business's cash receipts if it has $3,500 from cash sales, $4,750 from credit sales, $1,400 from personal checks, and $200 from interest income.
A.$9,850C.$8,450
B.$6,300 D.$5,100
29.What is a retailer's profit or loss if its income statement lists sales revenue of $640,000, cost of goods sold of $330,000, operating expenses of $290,000, and taxes of $5,000?
A.$17,000 loss C.$12,000 loss
B.$18,000 profit D.$15,000 profit
30.A small merchandising business that is developing an operating budget has determined its total expenses for the year will be $42,500. If the owner of the merchandising business wants to have a gross profit of $36,000, what amount of sales should be forecast?
A.$76,500 C.$81,000
B.$78,500 D.$82,000
31.Which of the following is an example of a business conducting a cost/benefit analysis:
A.Reviewing the production capabilities of area manufacturers
B.Identifying several vendors in a variety of geographic locations
C.Comparing the price and advantages of different brands of merchandise
D.Evaluating the qualifications and education of potential buyers
32.The CEO of a medium-sized retail chain asked the top five executives to each prepare a sales forecast for the upcoming year. The forecasts were then averaged together to get the composite forecast. What method of forecasting was used?
A.Sales force composite C.The Delphi technique
B.Jury of executive opinionD.Survey of buyer intentions
33.Why might a retailer offer a credit customer a revised payment plan or an extension agreement?
A.To collect accountsC.To increase profits
B.To charge higher interestD.To encourage more spending
34.What is a key outcome of having established collection procedures?
A.Improved cash flow C.Declining sales
B.Poor customer relations D.Increased costs
35.When determining its hiring needs, a mass merchandiser must first consider its financial status and its ______needs.
A.uniform C.productivity
B.secondary D.temporary
36.Why do human resources personnel usually have the responsibility of conducting exit interviews with purchasing-department employees who are leaving the company rather than the employees' immediate supervisors?
A.Employees may be reluctant to give information in person.
B.Employees rarely have any valuable information or suggestions.
C.Employees may be reluctant to criticize the department or supervisor.
D.Employees may have suggestions for improving the human resources department.
37.Should employees be part of management's efforts to create an equitable work environment?
A.No, including employees will create problems.C.Yes, this is a legal requirement.
B.No, this is management's responsibility. D.Yes, employees should be involved.
38.An organized way of continuously gathering, accessing, synthesizing, evaluating, and disseminating marketing data is known as
A.marketing research.C.marketing-information management.
B.information reporting. D.information processing.
39.Which of the following is most likely to occur if a merchandising business intentionally presents marketing information in an unethical or deceptive way:
A.Increased loyalty C.Lower credibility
B.Higher integrity D.Decreased visibility
40.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.
41.The first step in assessing a merchandising business's marketing-information needs is to
A.develop research guidelines. C.conduct a competitive analysis.
B.state the problem at hand. D.acquire secondary data.
42.An example of an internal source of marketing-research data is
A.employment statistics. C.industry sales.
B.financial statements.D.census figures.
43.Zoning regulations, local laws, security, and visibility are examples of the types of information retailers need when preparing a(n)
A.merchandising plan. C.competitive survey.
B.location feasibility study. D.annual IRS tax report.
44.The marketing concept recognizes the importance of a ______-oriented way of doing business.
A.product C.profit
B.consumer D.company
45.An important reason why a retailer develops marketing strategies is to give the business
A.objectives. C.identity.
B.credibility. D.direction.
46.The same person can be included in more than one
A.generation.C.target market.
B.income level. D.religion.
47.Why do merchandisers often conduct an environmental scan to gather information about changes or trends that are beginning to develop in the marketplace?
A.To identify potential threats C.To analyze training needs
B.To develop new products D.To predict future sales
48.What is a potential opportunity that a retail chain merchandising executive might identify in a SWOT analysis?
A.Risk of takeover C.Management turnover
B.Strong research and developmentD.Falling trade barriers
49.Which of the following is a factor that new retail stores consider when conducting an analysis of competitors in a specific market:
A.Size and availability of space C.Cost of supplies and equipment
B.Merchandise quality and price D.Industry research and training
50.From the following list of sales-forecasting information sources, identify those that are external and quantitative: 1. Economic trends, 2. Consumer spending, 3. Salespersons' views, 4. Past sales records,
5. Customer surveys, 6. Population changes
A.1, 2, and 4 C.2, 3, and 5
B.1, 2, and 6 D.2, 4, and 6
51.As part of their marketing plans, what do retailers develop first that are intended to lead to increased sales and revenue?
A.Activities C.Tactics
B.Strategies D.Objectives
52.Which of the following is a way a merchandising business might change its place strategy:
A.Revising service policies C.Reacting to market prices
B.Increasing availability D.Placing new advertisements
53.Information about how well an item sold during a recent advertising campaign is usually kept in a retailer's ______records.
A.financial C.promotional
B.operational D.professional
54.Which of the following is a trend in retailing that involves a store carrying a wide variety of unrelated goods in order to remain profitable:
A.Horizontal stockingC.Scrambled merchandising
B.Penetration selling D.Mass marketing
55.Correcting simple safety hazards in the workplace and reporting major problems to a supervisor are examples of preventing accidents by
A.maintaining a clean work area. C.lifting objects properly.
B.following proper health standards. D.practicing general safety procedures.
56.When a retailer successfully coordinates its merchandising activities with the information-management team and the advertising department, it is
A.providing feedback. C.producing more inputs.
B.performing effectively. D.developing standards.
57.Retailers' and wholesalers' primary purpose for purchasing is for
A.use in the business. C.consumption.
B.resale. D.conversion into a final product.
58.Production processes that rely heavily on expensive equipment and materials are ______processes.
A.standardizedC.capital-intensive
B.labor-intensive D.intermittent
59.A store manager expected an increase in sales during the holiday season and hired two extra part-time employees. What would result if sales did not increase?
A.The store would close early. C.The store would expand.
B.The store would lose money. D.The store would make a profit.
60.Last month, a merchandiser budgeted $165,750 in sales and 55% of that amount for expenses. If actual sales were $168,500 and 56% of that amount was spent on expenses, by what amount did the business's monthly income increase or decrease from the amount budgeted?
A.$407.50 increase C.$415.00 increase
B.$455.00 decrease D.$447.50 decrease
61.Which of the following would be the most appropriate time for retail employees to carry out basic housekeeping duties:
A.Immediately after opening or closing C.At the end of each shift
B.Just before opening or at closing timeD.During the noon hour
62.Why do retail personnel often check all areas of the store during closing procedures?
A.To reduce the need to replenish and straighten merchandise displays
B.So management can prepare the store for the operational audit
C.So retail personnel can begin the daily physical inventory counts
D.To verify that all shoppers have vacated the premises
63.Which of the following would be considered a long-term objective:
A.To read a book each weekC.To buy a new outfit
B.To learn to ride a motor bikeD.To earn a college degree
64.Which of the following industries exist to protect individuals and retail businesses from financial losses:
A.Operations management C.Insurance
B.Marketing research D.Accounting
65.Since volunteering at a local non-profit can provide networking opportunities for business expansion and professional growth, be sure to pick a project or cause that
A.is appropriate for your neighborhood. C.promotes your business.
B.brings you personal satisfaction. D.fits your skills and strengths.
66.Determine whether the following statement is true or false: The selling price of a product is not affected by its development costs.
A.True, selling price is not related to a product's development costs.
B.True, selling price is based on competitive prices of similar products.
C.False, a product's selling price is a percentage of its development costs.
D.False, businesses spend less to develop products that will sell at low prices.
67.Why is it necessary for a retailer to price its merchandise very carefully?
A.To get a fair share of the market C.To track competitors' activities
B.To create goodwill in the communityD.To attract employees to the business
68.An invoice totaling $10,525 offers a 3% discount for payment within 15 days or a 2% discount for payment within 30 days. These are examples of ______discounts.
A.cash C.seasonal
B.anticipation D.cumulative
69.A retail merchandiser setting prices according to the quantity of items that customers might buy at various prices is an example of using the ______pricing approach.
A.competition-based C.demand-based
B.cost-based D.broad-based
70.One way that product/service management benefits marketing is by helping to decrease
A.profits. C.sales.
B.business risk.D.financial success.
71.Which of the following employees is a good source for obtaining new product ideas because s/he is in contact with retail buyers on an ongoing basis:
A.Tax auditor C.Graphic designer
B.Sales representative D.Office manager
72.Which of the following is a purpose for a retail merchandiser to offer product warranties:
A.To avoid confusing the customers C.To reassure prospective customers
B.To transfer product ownership D.To automate the refund process
73.When a company reduces the number of products in its product mix, the company is implementing a(n) ______strategy.
A.positioning C.expansion
B.contractionD.alteration
74.Inventory reduction, sales stimulation, and new-product introduction are reasons that many merchandising businesses use ______techniques.
A.capital-investment C.dual-sponsorship
B.stock-turn D.product-bundling
75.To identify merchandise that the target market may want in the future, a buyer for a retail chain should
A.review budgets. C.improve quality.
B.forecast sales. D.monitor trends.
76.A product line extension might help a retail merchandiser that offers a short, shallow product mix to
A.decrease expenditures. C.improve channel relationships.
B.attract new target markets. D.reduce business liability.
77.The ultimate objective of the mass merchandiser in using brand names or slogans is to
A.identify the retailer.C.obtain a sponsor.
B.create awareness. D.encourage sales.
78.Which of the following is the most important question that a business considers when positioning its products:
A.What is the target market's financial liability and risk level?
B.Does the product have at least three hidden features?
C.What product benefit does the target market find most appealing?
D.How do our competitors forecast their sales for similar products?
79.Determining the amount of inventory to have on hand based on expected sales for one week is a method of
A.determining profit. C.planning stock.
B.preparing orders. D.calculating margins.
80.One factor the manager considers when developing a merchandise budget for a gift shop is the
A.vendor's shipping expenses. C.stock turnover rate.
B.salesperson's personal preferences. D.customer's restocking charges.
81.A large discount clothing store might use the grid layout to create distinct traffic aisles that allow customers to
A.find merchandise easily. C.feel relaxed.
B.browse through departments. D.shop leisurely.
82.An advantage to smaller retailers of using the services of a resident buying office is that the office usually is able to
A.negotiate favorable terms. C.monitor inventory levels.
B.provide attractive displays. D.increase profit margins.
83.A long-range benefit that a retailer may derive from promoting its company image is
A.new customers. C.immediate sales.
B.customer loyalty. D.reduced expenses.
84.Which of the following is a comprehensive list of the elements incorporated in a promotional mix:
A.Product, place, promotion, and price
B.Visual merchandising, samples, premiums, and sales promotion
C.Personal selling, advertising, publicity, and sales promotion
D.Publicity and public relations
85.When developing promotional activities, a mass merchandiser should consider how to accomplish its goal of attracting consumer attention in an effective and ______way.
A.intangible C.vague
B.tasteful D.inflexible
86.A small resale shop in a community of 2,000 residents wants to promote a two-day sale. The town has a radio station, a small newspaper, no public transportation system, and receives a television signal from a large metropolitan area 60 miles away. Which of the following types of promotion should the resale shop choose: