Retail Management Chapter 11 Quiz
73 Questions
100 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

Increasing sales by offering more breadth and depth can potentially reduce inventory turnover.

True

SKU rationalization programs can help in increasing inventory turnover without reducing sales.

True

What is the number of each SKU that the buyer wants to have available for purchase in each store?

  • Order point
  • Model stock plan (correct)
  • Stock-to-sales ratio
  • Merchandise budget plan
  • Assortment plan

    • Which term is defined as the percentage of demand for a particular SKU that is satisfied?

    <p>Product availability</p> Signup and view all the answers

    What is also referred to as the level of support or service level?

    <p>Product availability</p> Signup and view all the answers

    If a store sells 120 Santa items out of 150 customers, what is its service level?

    <p>80 percent</p> Signup and view all the answers

    Which statement does NOT describe the relationship between product availability and stock level?

    <p>The quantity of backup stock is fixed by a retailer and is not influenced by product availability.</p> Signup and view all the answers

    Which factors does NOT contribute to the increase of buffer stock levels?

    <p>Frequent store deliveries</p> Signup and view all the answers

    Which term describes inventory for which the level goes up and down in response to the replenishment process?

    <p>Cycle stock</p> Signup and view all the answers

    Which statement does NOT describe the approach that deals with cycle (base) stock?

    <p>Frequent orderings with smaller quantities will reduce transportation costs.</p> Signup and view all the answers

    What do retailers have to carry since sales and merchandise arrival cannot be predicted with perfect accuracy?

    <p>Backup stock</p> Signup and view all the answers

    To alleviate the probability of running out of muffin pans, what should the retailer maintain?

    <p>Backup stock</p> Signup and view all the answers

    Which factor does NOT determine the level of required backup stock?

    <p>Price of the product</p> Signup and view all the answers

    What is the amount of time between recognizing that an order needs to be placed and when the merchandise arrives call?

    <p>Lead time</p> Signup and view all the answers

    What is the percentage of SKUs received complete on a particular order from a vendor called?

    <p>Fill rate</p> Signup and view all the answers

    The retailer's information system determines the _____ by comparing the sales made through the POS terminals with the shipments received by the store.

    <p>Perpetual inventory</p> Signup and view all the answers

    What indicates the decision variables set by the buyer, such as product availability and backup stock needed?

    <p>Inventory management report</p> Signup and view all the answers

    In staple merchandise management systems, what is the amount of inventory that should not go below to avoid stockouts?

    <p>Order point</p> Signup and view all the answers

    The merchandise budget plan specifies the level of inventory needed to support the sales.

    <p>True</p> Signup and view all the answers

    What is used to keep track of actual merchandise flows?

    <p>Open-to-buy system</p> Signup and view all the answers

    An open-to-buy system compares the planned and actual end-of-month inventory.

    <p>True</p> Signup and view all the answers

    What's the next step after developing a plan for managing merchandise within a category?

    <p>Allocate the merchandise to the stores.</p> Signup and view all the answers

    According to annual sales classification of stores, which store type has the largest sales volume?

    <p>A stores</p> Signup and view all the answers

    What must retailers consider during difficult economic times in their allocation decisions?

    <p>Paycheck cycle</p> Signup and view all the answers

    What involves analyzing performance and making adjustments after developing a plan and allocating merchandise?

    <p>Analyzing performance and making adjustments.</p> Signup and view all the answers

    Which analysis technique compares actual and planned sales to determine merchandise needs?

    <p>Sell-through analysis</p> Signup and view all the answers

    What identifies the performance of individual SKUs in the assortment plan?

    <p>ABC analysis</p> Signup and view all the answers

    What does the 80-20 principle imply in retail?

    <p>Approximately 80 percent of sales come from 20 percent of products.</p> Signup and view all the answers

    The SKUs in a merchandise category are rank-ordered by several performance measures.

    <p>True</p> Signup and view all the answers

    What method for evaluating vendors uses a weighted-average score for each vendor?

    <p>Multiattribute analysis</p> Signup and view all the answers

    Which of the following is the process by which a retailer attempts to offer the appropriate quantity of the right merchandise, in the right place and at the right time while meeting the company's financial goals?

    <p>Merchandise management</p> Signup and view all the answers

    The highest classification level in a buying organization is the _____

    <p>merchandise group</p> Signup and view all the answers

    A merchandise group of a retailer is managed by a _____

    <p>general merchandise manager (GMM)</p> Signup and view all the answers

    Which of the following schemes is the correct order describing the levels of the merchandise classification scheme from the highest level to the lowest level?

    <p>Merchandise Group-Department-Classification-Category-SKU</p> Signup and view all the answers

    The second highest level in the merchandise classification structure is the _____

    <p>department</p> Signup and view all the answers

    Which of the following statements is NOT true of a department in the merchandise classification scheme?

    <p>It is managed by a general merchandise manager (GMM).</p> Signup and view all the answers

    Which of the following statements is NOT true of the merchandise classification scheme?

    <p>SKUs are the basic units of analysis for making merchandising management decisions.</p> Signup and view all the answers

    A _____ is a group of items targeting the same customer type, such as girls' sizes 4 to 6.

    <p>classification</p> Signup and view all the answers

    Which of the following products is an example of a classification?

    <p>Infant apparel</p> Signup and view all the answers

    Which of the following statements is true of a merchandise category?

    <p>It is the basic unit of analysis for merchandising decisions.</p> Signup and view all the answers

    Which of the following products is NOT an example of a stock-keeping unit (SKU)?

    <p>Teen necklaces with matching bracelets and rings</p> Signup and view all the answers

    A _____ is the basic unit of analysis for making merchandise management decisions.

    <p>merchandise category</p> Signup and view all the answers

    A(n) _____ is the smallest unit available for inventory control.

    <p>stock-keeping unit</p> Signup and view all the answers

    Which of the following is NOT true of category management?

    <p>A category manager is also called a category captain and works with vendors to get the most profit from collaborative relationships.</p> Signup and view all the answers

    Which of the following persons is a vendor who forms an alliance with a retailer to help gain consumer insight, satisfy customer needs, and improve performance and profit across a category?

    <p>category captain</p> Signup and view all the answers

    What is the drawback of utilizing category captains?

    <p>The vendor category captain could take advantage of their position and maximize their own sales.</p> Signup and view all the answers

    Why are vendors in a better position to manage a category than a smaller retailer?

    <p>Vendors have superior information through their focus on a specific category.</p> Signup and view all the answers

    Which of the following statements is NOT true of a potential problem with appointing vendors as category captains?

    <p>Appointing vendors as category captains makes merchandise management tasks difficult for retailers.</p> Signup and view all the answers

    A performance measure which assesses a buyer's contribution to ROA is called the _____

    <p>gross margin return on investment</p> Signup and view all the answers

    When there is a high inventory turnover, there is an increase in sales because:

    <p>New merchandise is continually available to customers.</p> Signup and view all the answers

    Which of the following is NOT a benefit of a high inventory turnover?

    <p>Reduced gross margin</p> Signup and view all the answers

    Which of the following is a consequence of a high inventory turnover?

    <p>Improved employee morale</p> Signup and view all the answers

    Merchandise like men's crew socks, canned peas, college ruled loose leaf paper, and 60-watt light bulbs would be considered _____ that are in continuous demand over an extended time period.

    <p>Staple merchandise</p> Signup and view all the answers

    Which of the following is an example of staple merchandise?

    <p>Men's black socks</p> Signup and view all the answers

    Smart Wash is a popular brand of detergent powder. The stock needs to be continuously replenished in stores and supermarkets due to its high demand. The detergent powder belongs to the category of _____

    <p>Staple merchandise</p> Signup and view all the answers

    _____ consist of items that are only in demand for a relatively short period of time.

    <p>Fashion merchandise categories</p> Signup and view all the answers

    Which of the following is NOT true of a fashion merchandise category?

    <p>Forecasting sales for this category is simplistic and predictable.</p> Signup and view all the answers

    Which of the following is NOT true of staple merchandise categories?

    <p>Because their sales are relatively steady from day-to-day, a periodic inventory system is used.</p> Signup and view all the answers

    Which of the following statements holds true for the purchase of staple merchandise?

    <p>Staple merchandise is purchased using a continuous replenishment system by monitoring sales and generating replacement orders.</p> Signup and view all the answers

    _____ categories consist of items whose sales fluctuate dramatically depending on the time of year.

    <p>Seasonal merchandise</p> Signup and view all the answers

    Garden rakes, lawn mowers, and sunscreen would be considered part of a(n) _____ category.

    <p>seasonal merchandise</p> Signup and view all the answers

    Which of the following is NOT true of fashion merchandise categories?

    <p>Buyers for fashion merchandise categories have a high degree of flexibility in correcting forecasting errors.</p> Signup and view all the answers

    Which of the following merchandise systems focuses on staying as close to out of stock as possible?

    <p>Fashion merchandise management system</p> Signup and view all the answers

    Which of the following merchandise categories is purchased in a manner similar to fashion merchandise?

    <p>Seasonal merchandise</p> Signup and view all the answers

    What is the first step in merchandise management planning?

    <p>Developing a forecast for sales</p> Signup and view all the answers

    Which of the following is true of the forecasting approach for staple merchandise categories?

    <p>Forecasts are typically based on extrapolating historical sales.</p> Signup and view all the answers

    Which of the following processes is an unstructured form of personal questioning used in market research and involves extensive probing to get individual respondents to talk in detail about a subject?

    <p>In-depth interview</p> Signup and view all the answers

    A(n) _____ is a small group of respondents interviewed by a moderator using a loosely structured format in which participants are encouraged to express their views and comment on the views of others in the group.

    <p>focus group</p> Signup and view all the answers

    Which of the following best describes variety?

    <p>The number of different merchandising subcategories within a store</p> Signup and view all the answers

    Father Christmas is a retail store in Georgia that sells a unique Santa made from fur, wool, and tapestry. The store does not sell any other product. Therefore, the store has no _____

    <p>variety</p> Signup and view all the answers

    _____ of a retailer's merchandise is the number of SKUs within a subcategory.

    <p>Assortment</p> Signup and view all the answers

    _____ of a merchandise category is the number of different merchandising subcategories offered.

    <p>Variety</p> Signup and view all the answers

    Which of the following statements about assortment is NOT true?

    <p>Offering a large assortment normally simplifies a customer's buying decision.</p> Signup and view all the answers

    Study Notes

    Merchandise Management

    • Merchandise management ensures retailers have the right quantity and type of products available while achieving financial goals.
    • It operates under various classifications to organize products effectively.

    Merchandise Classification Structure

    • Highest classification level is the merchandise group, followed by department, classification, category, and stock-keeping unit (SKU).
    • A general merchandise manager (GMM) oversees each merchandise group, while a divisional merchandise manager (DMM) manages departments.

    Stock-Keeping Units (SKUs)

    • SKUs represent the smallest inventory control unit, often defined by attributes like size, color, and style.
    • Examples of SKUs include specific clothing sizes and product variations.

    Categories and Classifications

    • A classification groups items targeting the same customer type, while a merchandise category forms the basic unit for merchandising decisions.
    • Staple merchandise consists of frequently purchased items, whereas fashion merchandise has a shorter sales lifespan and demands forecasting due to changing trends.

    Inventory Management

    • High inventory turnover indicates better sales as new products are regularly introduced to consumers.
    • Benefits of high inventory turnover include available new merchandise and improved employee morale but may also present risks like increased markdowns.

    Merchandise Types

    • Staple merchandise inflates demand over extended periods, while seasonal merchandise exhibits fluctuating sales based on the time of year.
    • Fashion merchandise is characterized by its short lifecycle and continual introduction of new styles, making sales forecasting more complex.

    Category Management

    • A category manager oversees product categories to optimize sales and space within a store, yet may face challenges like vendor dominance in proposed assortment strategies.
    • Engaging category captains (vendors with strategic alliances) can enhance category efficiency but also poses risks of product bias and favoritism.

    Forecasting Sales

    • Accurate forecasting for staple merchandise relies on historical sales data rather than speculative methods like focus groups.
    • Buyers must balance inventory with demand by employing continuous replenishment systems.

    Product Availability and Assortment

    • Product availability refers to the fulfillment of customer demand for SKUs, akin to service levels within inventory context.
    • Assortment planning necessitates a strategic approach, weighing the breadth and depth of available products against customer preferences and market trends.

    Service Levels

    • Service level quantifies the percentage of demand fulfilled, assessing retailer efficiency in stock management.

    Learning Points

    • Understanding the hierarchy in merchandise classifications helps buyers make informed decisions.
    • Successful merchandise management involves a balance between maintaining a desirable assortment and ensuring product availability based on consumer needs.### Inventory Management and Backup Stock
    • Increased backup stock enhances product availability for retailers.
    • Backup stock quantity remains fixed and is not influenced by product availability.
    • Excessive product availability incurs high inventory costs, diverting funds from enhancing product variety.
    • High product availability can lead to substantial inventory investments.

    Buffer Stock Influencing Factors

    • High service levels, fluctuating demand, long vendor lead times, and variations in lead time increase buffer stock.
    • Frequent store deliveries do not contribute to increased buffer stock levels.

    Stock Types

    • Cycle stock fluctuates based on replenishment processes.
    • Backup stock serves as a safety net due to unpredictable sales and delivery times.

    Order Management

    • Retailers maintain backup stock to prevent stockouts during varying sales periods.
    • Lead time describes the duration between order placement and merchandise arrival.
    • Fill rate measures the percentage of complete SKUs received in an order.

    Inventory Tracking and Control

    • Perpetual inventory is derived from POS sales data and inventory shipments.
    • Inventory management reports assist buyers in decision-making concerning stock levels and order quantities.
    • Order point indicates the minimum inventory level before a stockout may occur.

    Merchandise Planning

    • The merchandise budget plan specifies the necessary inventory levels to support sales goals.
    • Open-to-buy systems track current inventory levels, deliveries, and sales statistics.
    • Comparison of planned and actual end-of-month inventory identifies discrepancies in merchandise management.

    Allocation and Performance Analysis

    • Post-planning, merchandise allocations to stores are essential for efficient management.
    • Retailers classify stores based on annual sales for better inventory distribution.
    • Performance adjustments occur through analysis after merchandise allocation.

    Sales Analysis Techniques

    • Sell-through analysis compares actual sales against planned expectations to evaluate inventory needs.
    • ABC analysis ranks SKUs based on performance, with the 80-20 principle indicating that a small percentage of products drives most sales.

    Vendor Evaluation

    • Multiattribute analysis scores vendors based on various performance criteria to facilitate informed decision-making.

    Studying That Suits You

    Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

    Quiz Team

    Description

    Test your knowledge on Chapter 11 of Retail Management with this quiz. It covers key concepts such as merchandise management and inventory control. Perfect for students looking to solidify their understanding of retail strategies.

    More Like This

    Master Revenue Recognition in Accounting
    6 questions

    Master Revenue Recognition in Accounting

    StrongerKoala avatar
    StrongerKoala
    Retailing Basics Quiz
    12 questions

    Retailing Basics Quiz

    NobleTanzanite320 avatar
    NobleTanzanite320
    Stockage et Rangement des Marchandises
    6 questions

    Stockage et Rangement des Marchandises

    FieryPhosphorus avatar
    FieryPhosphorus
    ACC101 Merchandise Inventory Quiz
    15 questions

    ACC101 Merchandise Inventory Quiz

    EnthralledSaxhorn avatar
    EnthralledSaxhorn
    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser