Deck 10: Merchandise Management

Question 1

What is the process by which a retailer attempts to offer the right quantity of the right merchandise at the right time while meeting the company's financial goals?

A) Quick response inventory management
B) Materials procurement and handling
C) Inventory control
D) Category management
E) Merchandise management

Answer 1

E

Question 2

Which of the following is an example of a reasonable category for The Stork Helper, a retail chain that specializes in items needed for infants?

A) Infant toys
B) Lighting fixtures (lamps and ceiling) for baby rooms
C) Wooden and plastic high chairs from a variety of different vendors
D) Baby cribs and cradles
E) All of these are examples of categories

Answer 2

E

Question 3

Which of the following are an example of staple merchandise?

A) Justin Bieber CDs
B) "Fish net" stockings
C) Low-rise hipster jeans
D) Platform shoes in the 1970s
E) Men's black socks

Answer 3

E

Question 4

Which of the following statements is true about the basic unit of analysis for making merchandise decisions?

A) Retailers and their vendors typically use the same methods for identifying categories
B) Categories are never defined by brand names
C) Custom wheels would not be a category for a tire retailer
D) The composition of a category must be determined by the manufacturer in order to be logical
E) For a pet storeowner, books on the care and feeding of birds would be an example of a category

Question 5

Some sources of information that retailers use to develop forecasts for fashion merchandise categories include:

A) vendors
B) fashion and trend services
C) previous sales data
D) market research
E) All of these

Question 6

The producers of the Spiderman movies hoped that merchandise made with the superhero would have a period of great popularity. But they also realized that such merchandise would not be popular for long because they are:

A) fads
B) staples
C) fashions
D) styles
E) cycles

Question 7

Housewares, boys' apparel, and Liz Claiborne brand women's apparel would be examples of:

A) categories
B) variety
C) SKUs
D) breadth of merchandise
E) inventory investment

Question 8

Which of the following is true about the way most retailers operate?

A) Work to achieve adequate return on investment to the owners.
B) The primary goal is to sell merchandise.
C) After financial objectives are set, buying decisions are made.
D) Merchandise management is selling the right merchandise at the right time.
E) All of these are true.

Question 9

is inventory that is in continuous demand by customers.

A) Stock merchandise
B) Style merchandise
C) Essential merchandise
D) Staple merchandise
E) Fashion merchandise

Question 10

An example of seasonal merchandise is:

A) chewing gum
B) boxed milk
C) antique armoires
D) wool sweaters
E) thank-you notes

Question 11

Factors that impact sales forecasts, merchandise plans, and budgets include all of the following EXCEPT:

A) Whether advertising complements the product
B) The price the product is offered at
C) Seasonality of the item and timing of the promotional event
D) Shelf placement
E) All of these impact sales forecasts, merchandise plans, and budgets

Question 12

During the maturity stage of the category life cycle,:

A) distribution intensity is limited
B) the level of variety is probably the greatest
C) the promotion is informative in nature
D) the target market is middle-income adopters
E) a penetration or skimming pricing strategy is implemented

Question 13

A(n) __ is an assortment of items that a customer sees as reasonable substitutes for each other.

A) assortment plan
B) classification
C) category
D) inventory unit
E) SKU

Question 14

Which of the following are an example of a reasonable category of merchandise for a garden centre?

A) Fertilizer and lawn chemicals
B) Mowers
C) Hand tools
D) Perennials
E) All of these

Question 15

Which of the following best describes a fad?

A) A merchandise category that typically lasts several seasons
B) Inventory that can be described as basic merchandise
C) Merchandise that is in continuous demand over an extended period
D) Inventory whose sales fluctuate dramatically according to the time of the year
E) A merchandise category that generates a lot of sales for a short time

Question 16

The is the basic unit of analysis for making merchandise decisions.

A) variety
B) assortment
C) classification
D) category
E) SKU

Question 17

Which of the following items is an example of fashion merchandise?

A) Matching sheets and pillowcases covered with flowers
B) Louis XVI style furniture
C) London Fog raincoats
D) Floor-length evening gowns
E) All of these

Question 18

Where are you most likely to find staple merchandise?

A) Department store
B) Grocery Stores
C) Superstore fashion boutiques
D) Computer software
E) Manufacturer's outlet

Question 19

Which of the following best describes a category?

A) An assortment of complementary SKUs
B) The largest unit available for keeping inventory
C) The unit of inventory least affected by seasonal trends
D) The smallest unit available for keeping inventory
E) An assortment of SKUs that the customer sees as reasonable substitutes for each other

Question 20

Pokemon cards were as popular as the Rubick's Cube, the Chia Pet, and the Cabbage Patch dolls, but also declined rapidly, with little following from its once loyal fans. Pokemon cards could best be described as what type of merchandise?

A) Fad
B) Fashion
C) Basic
D) Seasonal
E) Staple

Question 21

The highest classification level in the buying organization is called the:

A) buying group
B) division managers
C) retail group
D) merchandise group
E) category group

Question 22

A retailer that sells 10-pound bags of senior dog food has found that some weeks he sells thirty 10-pound bags and other weeks he sells none. A reorder can take up to three weeks. The probability of running out of that size bag of dog food and alienating his customers can be alleviated by maintaining:

A) cycle stock
B) base stock
C) safety stock
D) staple stock
E) seasonal stock

Question 23

Procter and Gamble hired Lyle to work with Walmart to help better satisfy the consumers' cleaning supply needs and balance assortments for the category. Which of the following could best describe Lyle's position?

A) Category captain
B) Category vendor
C) Product supervisor
D) Assortment manager
E) Category manager

Question 24

Which of the following is not an example of a SKU?

A) Queen size Sealy mattress, beige, with extra back support and Scotch Guard
B) Teen necklaces with matching bracelets and rings
C) No-ad sunscreen, SPF 50 in 220 ml bottle
D) Secret pantyhose size B, navy, reinforced toe
E) PC ginger ale in 355 ml can

Question 25

Father Christmas is a retail store that sells one-of-a-kind Santa Claus figures made from fur, wool, and tapestry. That is all the store sells. In terms of product breadth.

A) product mix
B) merchandise depth
C) horizontal integration
D) assortment
E) variety

Question 26

A source of information for making category-level sales forecasts is:

A) vendors
B) observation of competition
C) trade publications
D) previous store sales
E) all of these

Question 27

Which of the following is inventory that results from the replenishment process and is required to meet demand when the retailer can predict demand and replenishment times?

A) Lead stock
B) Safety stock
C) Fashion stock
D) Cycle stock
E) Seasonal stock

Question 28

is used as a cushion for cycle stock so the retailer will not run out before the next order arrives.

A) Core stock
B) Seasonal stock
C) Base stock
D) Cycle stock
E) Safety stock

Question 29

The amount of safety stock a retailer holds is dependent on:

A) the retailer's level of product availability
B) the vendor's level of product availability
C) the variability of lead time
D) demand fluctuations
E) all of these

Question 30

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

A) Assortment
B) Merchandise mix
C) Variety
D) Product availability
E) Economic order quantity

Question 31

Father Christmas is a retail store in Winnipeg that sells one-of-a-kind Santas made from fur, wool, and tapestry. The store has 5 cash registers and a total "operating liability ratio" of 100. If 150 customers wish to buy Santas from this store, and it sells only 120 before running out of stock, what is its service level?

A) 80 percent
B) 125 percent
C) 150 percent
D) 66.7 percent
E) 20 percent

Question 32

Monty's Men's Wear sells ties made of silk, wool, cotton, and linen, in many colours, styles, and lengths. In terms of

A) merchandise mixture
B) service level
C) assortment
D) horizontal integration
E) variety

Question 33

Which of the following is an example of a SKU?

A) Purses
B) Dockers pants
C) Liz Claiborne dress, size 4, red with long sleeves, silk
D) Timex Sports Watches
E) Secret pantyhose

Question 34

Which of the following best describes variety?

A) The number of SKUs in a store
B) Inventory that results from a replenishment process
C) Product availability
D) The percentage of demand for a particular SKU that is satisfied
E) The number of different merchandising categories within a store

Question 35

What is a drawback of utilizing a category captain?

A) Retailers tend to ignore best practices advice
B) Retailers can take advantage of their position and minimize competing brands
C) Retailers take advantage of the information and test legal limits
D) Vendors could take advantage of their position and maximize their own sales
E) There are no drawbacks to utilizing a category captain

Question 36

Which of the following must a buyer consider when determining an assortment for a category like lawn mowers?

A) The degree to which it complements other categories in the store
B) The profitability of the merchandise mix
C) The corporate philosophy toward the assortment
D) Physical characteristics of the store
E) All of these

Question 37

Which of the following persons studies a category's past performance, considers trends in the market, and makes projections for assortments?

A) The chief financial officer
B) Top management
C) The vice presidents of the merchandise groups
D) Buyers
E) The customer

Question 38

Top management sets the merchandise direction for the company by:

A) establishing the performance goals
B) deciding which merchandise classifications deserve more emphasis
C) defining the target market
D) deciding which merchandise classifications deserve less emphasis
E) all of these

Question 39

Which of the following 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?

A) Assortment supervisor
B) Consumer advocate
C) Category manager
D) Category captain
E) Category specialist

Question 40

is the number of SKUs within a category.

A) Variety
B) Merchandise mixture
C) Merchandise breadth
D) Assortment
E) Horizontal integration

Question 41

How does top management set the merchandising direction for the retail company?

Question 42

How can increasing assortment adversely affect customers?

Question 43

What is the difference between variety and assortment?

Question 44

Shrinkage can:

A) not be caused by damaged goods
B) not be caused by shoplifting
C) be inventory's recorded value based on merchandise bought and received
D) be inventory reduction caused by poor bookkeeping
E) be physical inventory in stores and distribution

Question 45

What is a category life cycle?

Question 46

What is lead time?

A) The time it takes for a new product to progress through the life cycle
B) The amount of time it takes for a vendor to negotiate price with buyers
C) The time it takes retailers to gain customer loyalty
D) The amount of time it takes to develop product assortment in the assortment planning process
E) The time from recognizing that an order needs to be placed and the point it arrives in the store ready for sale

Question 47

Why is it more difficult to manage cycle and safety stock for fashion merchandise than for staple merchandise?

Question 48

List the classification levels of the standard merchandise classification scheme.

Question 49

What is a potential problem with establishing a category captain?

Question 50

In terms of merchandise, what is the difference between a classification and a category?

Question 51

Imagine a retail chain that sells CDs that has four buyers for its country & Western music division. Each one deals with one of the following recording companies: RCA, EMI, Warner Music, and
Atlantic. Why might this approach to merchandise planning be thought as inefficient?

Question 52

Compare and contrast broad and shallow assortment planning with that of narrow and deep assortment planning.

Question 53

Why is it disadvantageous to forecast sales at an aggregate level for the chain rather than on a store-by-store basis?

Question 54

Of variety, assortment, and product availability, which is the most strategic? Explain your answer.

Question 55

The period from the time the grocer realized she was out of lettuce until the produce shipment arrived and the lettuce was marked for the sales floor is called:

A) stocking time
B) ordering time
C) lead time
D) cycle time
E) safety time

Question 56

What are the different assortment balance issues exclusive to the electronic channel?

Question 57

How does the service level requested by the buyer impact the inventory investment? Explain your answer.