MB205 – Retail Management

Database (Unit 4 & 5)

Multiple Choice Questions

  1. Each merchandise group is managed by:
  2. a general merchandise manager
  3. a divisional merchandise manager
  4. a category manager
  5. a senior buyer
  6. A(n) ______is an assortment of items that a customer sees as reasonable substitutes for each other.
  7. inventory unit
  8. category
  9. assortment plan
  10. SKU
  11. A stock keeping unit is
  12. a group of items of similar merchandise
  13. the merchandise unit used for merchandise budget planning
  14. the smallest unit available for keeping inventory
  15. a group of complementary products
  16. Which of the following describes one of the advantages inherent in rapid inventory turnover?
  17. increased employee turnover
  18. greater probability of obsolescence
  19. more money for market opportunities
  20. decreased sales volume
  21. What can be expected to happen during the maturity stage of the category life cycle?
  22. High income innovators will be the target market.
  23. Distribution will be limited.
  24. There will be one basic offering.
  25. Prices will be lower.
  26. _____ is inventory used to guard against going out of stock when demand exceeds forecasts or when merchandise is delayed.
  27. cycle stock
  28. backup stock
  29. base stock
  30. Nonledgered inventory
  31. What is the fundamental difference between buying and merchandising?
  32. Buying includes product purchases but not their sale, while merchandising includes the broad range of activities involved in buying and selling goods and services.
  33. Buying responsibility is in the main store, while responsibility for merchandising is in the branches.
  34. Buying responsibility is a line function, while merchandising responsibility is a staff function.
  35. Buying responsibility is a staff function, while merchandising is a line function.
  36. A major advantage of a merchandising philosophy is that:
  37. responsibility and authority are clear
  38. morale of in-store personnel increases
  39. it fosters the development of specialists
  40. it recognizes that buyers may not be effective supervisors
  41. Which of the following is a type of scrambled merchandising?
  42. cross-merchandising
  43. micro-merchandising
  44. category management
  45. direct product profitability
  46. Which of the following is not an advantage of a formal buying organization?
  47. well-defined responsibilities
  48. the use of full-time, specialized merchandisers
  49. low costs
  50. well-defined authority
  51. Items such as milk, bread, and canned soup are examples of:
  52. staple merchandise
  53. fashion merchandise
  54. seasonal merchandise
  55. fads
  56. Products that have cyclical sales due to changing tastes and lifestyles are:
  57. assortment merchandise
  58. fashion merchandise
  59. fad merchandise
  60. nostalgic merchandise
  61. A high level of sales is generated for a relatively short time with:
  62. seasonal merchandise
  63. fad merchandise
  64. fashion merchandise
  65. nostalgic merchandise
  66. A fashion that is first accepted by upscale consumers and undergoes changes in its basic form before it is sold to the general public reflects a:
  67. horizontal trend
  68. vertical trend
  69. horizontal life cycle
  70. vertical life cycle
  71. The number of distinct goods/service categories a retailer carries is referred to as the:
  72. consistency of the product mix
  73. product life cycle
  74. depth of assortment
  75. width of assortment
  76. A retailer seeking to offer one-stop shopping and to generate customer loyalty would follow which of the following retail assortment strategies?
  77. wide and deep
  78. wide and shallow
  79. narrow and deep
  80. narrow and shallow
  81. Private (dealer) brands:
  82. are produced and controlled by manufacturers
  83. are more expensive for consumers
  84. are supported by manufacturer advertising
  85. contain the wholesaler's or retailer's name
  86. Which brands receive secondary shelf locations, have little or no promotional support, and are stocked in limited assortments?
  87. manufactured brands
  88. private brands
  89. generic brands
  90. cooperative labels
  91. Products are arranged into strategic business units to better meet consumer needs and to achieve sales and profit goals in:
  92. category management
  93. direct product profitability
  94. retail auditing
  95. merchandising
  96. Which of the following measures is similar to inventory turnover?
  97. cash flow
  98. gross margin return on inventory (GMROI)
  99. days' supply
  100. direct product profitability (DPP)
  101. An item's gross profit less its direct retailing costs equals its:
  102. gross margin
  103. gross margin return on inventory (GMROI)
  104. net profit
  105. direct product profitability (DPP)
  106. The most valuable sources of data for merchandising decisions are:
  107. suppliers
  108. retail personnel
  109. consumers
  110. competitors
  111. A retailer can determine consumer requests for unstocked or out-of-stock merchandise through the use of a(n):
  112. basic stock list
  113. never-out list
  114. electronic data interchange system
  115. want book
  116. Which of these is not a potential source of merchandise?
  117. company-owned supplier
  118. competing retailer
  119. outside, regularly used supplier
  120. outside, new supplier
  121. Which of the following forms of evaluating merchandise is most appropriate for a fine jewellery retailer?
  122. sampling
  123. inspection
  124. description
  125. final selection
  126. Which of the following forms of evaluating merchandise is most appropriate for standardized, non-breakable, and nonperishable merchandise?
  127. sampling
  128. inspection
  129. description
  130. final selection
  131. Off-price retailers and other deep discounters generally employ which form of buying?
  132. opportunistic buying
  133. decentralized buying
  134. resident buying house buying
  135. long-term buying contract
  136. Payments required by retailers for providing shelf space in stores are:
  137. shelf facing fees
  138. slotting allowances
  139. multiple shelf face allowances
  140. shelf space allowances
  141. Inventory risk to a retailer is lowest in a:
  142. short-term supply contract
  143. long-term supply contract
  144. consignment purchase
  145. negotiated purchase
  146. Which of the following can result by maintaining a large inventory?
  147. quantity discounts obtained on larger orders
  148. low investment costs
  149. high transportation charge
  150. difficulty with control and handling
  151. Which of the following is not a potential advantage of maintaining a small inventory?
  152. low investment costs
  153. low impact of order delay on sales
  154. low storage costs
  155. low obsolescence
  156. Which of these is not a logistics process?
  157. order processing
  158. inventory management
  159. customer service
  160. store operations
  161. The logistics aspect of a value delivery chain is:
  162. a supply chain
  163. direct store delivery
  164. value orientation
  165. inventory planning
  166. Direct store distribution (DSD) is most appropriate for:
  167. small products
  168. perishable products
  169. imported products
  170. products subject to high tariffs
  171. Anti-theft tags are placed on products when they are produced with:
  172. vendor-managed inventory (VMI)
  173. floor-ready merchandise
  174. source tagging
  175. reverse logistics
  176. The greatest source of inventory shrinkage is caused by:
  177. fraud by customers
  178. customer shoplifting
  179. employee theft
  180. vendor fraud
  181. Electronic article surveillance is an aspect of:
  182. merchandise security
  183. vendor-managed inventory (VMI)
  184. source tagging
  185. reverse logistics
  186. Which of the following is an example of reverse logistics?
  187. direct store delivery
  188. vendor-managed inventory (VMI)
  189. source tagging
  190. handling of returns
  191. CRM is based on the philosophy that retailers can increase their profitability by:
  192. providing better assortments
  193. expanding their services
  194. extending hours of operation
  195. building relationships with their better customers
  196. What is the first step in the CRM process?
  197. analyzing data
  198. developing CRM programs
  199. constructing a customer database
  200. identifying the target customers
  201. When consumers ask a retailer not to use their personal information, they are:
  202. opting in
  203. opting out
  204. choosing/consenting
  205. declining public domain statutes
  206. What is wrong with the 80-20 scheme?
  207. It doesn't consider the differences among the 80% of customers in the "rest" segment.
  208. It doesn't break down the variables within the remaining 20%.
  209. It is too broad to segment customers in this way.
  210. It doesn't consider the differences between 80% and the 20%.
  211. Which of the following does NOT describe customer relationship management programs?
  212. It helps retailers to retain the best customers.
  213. It helps retailers to get rid of unprofitable customers.
  214. It helps retailers to identify customers according to their current and future profit potentials.
  215. It helps retailers to convert unprofitable customers to the best customers.

Fill in the Blanks

  1. Merchandising consists of the activities involved in acquiring particular goods and/or services and making them available at the places, times, and prices and in the quantity that will enable a retailer to reach its goals.
  2. An advantage of a merchandising philosophy is that the buyer is close to consumers through his or her direct involvement with selling.
  3. A(n) resident buying office is used when a retailer wants to keep in close touch with key market trends and cannot do so through just its headquarters buying staff.
  4. Under cooperative buying, a group of independent retailers gets together to make large purchases from suppliers and obtain volume discounts.
  5. Abasic stock list specifies the inventory level, colour, brand, style category, size, package, and so on for every staple item carried by a retailer.
  6. The expected behaviour of a good or service over its life is depicted in the product life cycle.
  7. During the maturiry stage of the product life cycle, sales reach the maximum level.
  8. Width of assortment refers to the number of distinct goods/service categories (product lines) a retailer carries
  9. Depth of assortment refers to the variety in any one goods/service category (product line a retailer carries).
  10. Private brands contain names designated by wholesalers or retailers.
  11. Private brands lead to customer loyalty to retailers rather than manufacturers.
  12. In category management, groupings of products are arranged into strategic business units.
  13. A want book system is a formal way to record consumer requests for unstocked or out-of-stock merchandise.
  14. A(n) chargeback is a reduction in a bill due to an infraction such as late shipments of damaged and expired goods.
  15. A retailer should evaluate the regular purchase of breakable or perishable items through sampling.
  16. A new or special order usually results in a negotiated contract.
  17. A(n) slotting allowance is a payment that retailers require of vendors for providing shelf space.
  18. In a consignment purchase, a retailer has no risk because title is not being taken.
  19. Logistics involves the total process of planning, implementing, and coordinating the physical movement of merchandise from the manufacturer (wholesaler) to the retailer to the customer in the most timely, effective, and cost-efficient manner possible.
  20. A(n) supply chain is the logistics part of a value delivery chain.
  21. In quick response inventory planning, a retailer reduces the amount of inventory it keeps on hand by ordering more frequently and in lower quantity.
  22. With floor-ready merchandise, items are pre-ticketed and placed on hangers by manufacturers.
  23. The practice of shipping goods directly from suppliers to individual stores is called direct store distribution.
  24. With vendor-managed inventory, a supplier participates in the inventory management programs of its products at its major retailer clients.
  25. Inventory shrinkage can be caused by employee theft, customer shoplifting, and fraud and administrative errors by vendors.
  26. From the customer's perspective, value is the perception_____ the shopper has of a value chain.
  27. A retail value chain represents the total bundle of benefits offered to consumers through a channel of distribution.
  28. The minimum value chain elements a given customer segment expects from a given type of retailer is a(n) expected retail strategy.
  29. Core customers are worth nurturing with long relationships.
  30. Giving employees discretion, within limits, to satisfy a customer is called employee empowerment.
  31. Customer Loyalty Programmes reward a retailer's best customers.
  32. Consumer loyalty programs are intended to reward a retailer's best customers, the ones with whom it wants to form long-lasting relationships.
  33. The members of a distribution channel jointly represent a(n) value delivery system, which comprises all of the activities needed to develop, produce, deliver, sell, and service particular goods and services.
  34. A relationship-oriented technique in which channel members collaborate to manage products by category rather than individual items is known as category management.
  35. The use of a hotel room by a tourist is an example of a(n) rented good.
  36. The inseparability of the service provider and his or her services means the owner-operator is often indispensable and good customer relations are necessary.
  37. Electronic banking enables centralized record keeping and lets customers complete transactions 24 hours a day, 7 days a week at bank and non-bank locations.
  38. When a retailer has a sense of ethics, it acts in a trustworthy, fair, honest, and respectful manner with each of its constituencies.
  39. The development of product-testing programs and the setting of clear procedures for handling consumer complaints are examples of consumerism.