Deck 15: Implementing Merchandise Plans

Question 1

A disadvantage to the use of frequent ordering in small quantities is the ________.

A) loss of quantity discounts
B) high investment costs
C) high insurance costs
D) high storage costs

Answer 1

A

Question 2

The retailer does not pay for items until they are sold and can return merchandise ________.

A) when title is transferred on purchase
B) when title is transferred when the shipment is received
C) for all generics
D) in a consignment purchase

Answer 2

D

Question 3

A deduction from a bill made by a retailer due to such infractions as late shipping,damaged,or expired goods is called a ________.

A) penalty
B) liquidated damage
C) chargeback
D) holdback

Answer 3

C

Question 4

A retailer can most effectively reduce its inventory risk through ________.

A) memorandum purchases
B) consignment purchases
C) floor-ready merchandise
D) private label purchases

Question 5

Which of the following is not a merchandise source?

A) resident buying office
B) company-owned
C) outside, regularly used supplier
D) outside, new supplier

Question 6

Customer requests for unstocked or out-of-stock merchandise are recorded in a(n)________.

A) generic product file
B) OCR-A system
C) UPC system
D) want book (want slip)

Question 7

A retailer reduces the amount of inventory it keeps on hand by ordering more frequently and in lower quantity through ________.

A) quick response (QR) inventory planning
B) top-down inventory planning
C) bottom-up inventory planning
D) UPC-based computerized ordering systems

Question 8

An advantage to a retailer's placing large orders for merchandise is ________.

A) quantity discounts obtained through volume purchases
B) a lower chance of fashion or functional obsolescence
C) lower inventory holding costs
D) high inventory turnover

Question 9

Opportunistic buying is most commonly utilized by ________.

A) department stores
B) off-price retailers
C) supermarkets
D) specialty stores

Question 10

The logistics aspect of a value delivery chain is ________.

A) third-party logistics management
B) electronic data interchange (EDI)
C) quick response (QR) inventory management
D) supply chain management

Question 11

Description buying is most appropriate for ________.

A) breakable, perishable, or expensive items
B) standardized, nonbreakable, and nonperishable merchandise
C) jewelry and art works
D) nonstandardized, breakable, and perishable merchandise

Question 12

A regular order is characterized by ________.

A) a high degree of negotiation on an ongoing basis
B) a high level of opportunistic buying
C) a uniform contract with standardized terms
D) the use of opportunistic buying by a discounter

Question 13

A want book (want slip)is used to record ________.

A) budget requests by store operations personnel
B) vendors that are preferred by retail personnel
C) budget requests for capital equipment
D) customer requests for merchandise that is either out of stock or unstocked

Question 14

An example of items that should be evaluated by a retailer by inspection are ________.

A) college textbooks
B) antique furniture
C) color televisions
D) file cabinets

Question 15

A purchaser of fine antiques is most likely to evaluate merchandise through ________.

A) description
B) sampling
C) inspection
D) testing by an independent agency

Question 16

Unlike other methods of inventory management,logistics ________.

A) is concerned with the flow of information via paperless means
B) regards order processing and fulfillment, transportation, warehousing, customer service, and inventory management as interdependent
C) seeks to minimize inventory accumulations in the whole channel system
D) seeks to trade off the lower inventory levels with lower levels of customer service

Question 17

A logistics system can best be defined as the ________.

A) reduction of inventory in a system through more rapid reordering of goods in lower quantities
B) use of computer-assisted ordering between retailers and their suppliers
C) total process of moving goods from a manufacturer to a customer in the most timely, effective, and cost-efficient manner possible
D) acquisition and maintenance of a proper merchandise assortment while ordering, shipping, handling, and other related costs are kept in check

Question 18

A broad-based approach to supply chain management among a network of trading partners is ________.

A) third-party logistics
B) collaborative planning, forecasting, and replenishment (CPFR)
C) supply chain management
D) electronic data interchange (EDI)

Question 19

A new or special order usually results in a ________.

A) negotiated contract
B) uniform contract
C) new task purchase
D) consignment sale

Question 20

A retailer can most effectively track consumer purchases through ________.

A) a consumer loyalty program
B) panel data
C) want slips
D) want books

Question 21

A retailer reduces its invoice by 5 percent since a supplier shipped seasonal merchandise 10 days late.The price reduction is designed to compensate the retailer for additional markdowns.This reduction illustrates a ________.

A) markdown adjustment
B) slotting fee
C) slotting allowance
D) chargeback

Question 22

In a civil restitution law,________.

A) shoplifters cannot plea bargain the minimum state sentence for their crime
B) shoplifters must undertake community service as restitution for their crime
C) shoplifters must pay for stolen merchandise or face arrests and criminal trials
D) employees convicted of stealing merchandise must be registered with local police departments

Question 23

The use of such strategies as quick response inventory planning,electronic data interchange,and logistics planning in an integrated manner by supermarkets is referred to as ________.

A) efficient consumer response (ECR)
B) efficient inventory management
C) effective inventory management
D) supermarket logistics

Question 24

A quick response (QR)inventory planning system is most effective when used in conjunction with ________.

A) scrambled merchandising
B) floor-ready merchandise
C) efficient consumer response (ECR)
D) electronic article surveillance

Question 25

According to a major study of inventory shrinkage,________.

A) vendors' short shipping accounts for the major cause of inventory shrinkage
B) customer theft is greater than employee theft
C) employee theft is greater than shopper theft
D) electronic article surveillance is not an effective deterrent of inventory shrinkage

Question 26

A major problem associated with the use of want books (want slips)is that they ________.

A) require a sophisticated database
B) rely on retail salespeople to enter the relevant information
C) require a computer-based retail information system
D) require electronic data interchange (EDI) capability

Question 27

The merchandise flow from the retailer back through the supply chain is termed ________.

A) reverse logistics
B) inbound logistics
C) third-party logistics
D) supply chain management

Question 28

Which of the following is an advantage of central warehousing for a chain retailer?

A) lower transportation costs to individual stores
B) closeness to individual stores
C) increased capability of quick response systems
D) increased use of mechanization in the processing of goods

Question 29

A paperless,computer-to-computer relationship between retailers and vendors is ________.

A) electronic data interchange (EDI)
B) quick response inventory planning (QR)
C) floor-ready merchandise
D) a basic automatic replenishment system

Question 30

A retailer found that a small percent of goods represented a large proportion of the store's total shrinkage.Which of the following strategies would be most effective?

A) use of in-store guards
B) electronic article surveillance on the affected goods
C) use of employee background checks
D) use of mystery shoppers to watch for shoplifting

Question 31

A retailer can eliminate use of its own warehouses through ________.

A) ordering goods in large quantities
B) use of direct store delivery (DSD)
C) use of electronic data interchange (EDI) with key vendors
D) taking advantage of opportunities for quantity discounts

Question 32

A retailer and a supplier both utilize relationship marketing.Which merchandise source do they best illustrate?

A) outside, new supplier
B) outside, regularly used supplier
C) opportunistic buying
D) company-owned

Question 33

Which source of merchandise utilizes vertical integration by a retailer?

A) company-owned
B) outside, new supplier
C) outside, regularly used supplier
D) cooperative-buying arrangement

Question 34

Electronic article surveillance seeks to directly reduce inventory shrinkage by ________.

A) using cameras to monitor dressing room activity
B) reducing theft on specific items that have been targeted by management
C) setting up strict rules on the number of goods that can be tried on in dressing rooms at one time
D) chaining expensive clothes together to reduce theft

Question 35

Overall shrinkage accounts (employee theft,customer shoplifting,vendor theft,and administrative errors)accounts for approximately what percent of total retail sales in the United States?

A) 1.4
B) 2.5
C) 4.0
D) 6.0

Question 36

An effective store security program needs to be operational ________.

A) only when the store is closed
B) only when the store is open
C) only with customers
D) with customers and employees when the store is both closed and open

Question 37

Which one of the following activities by suppliers is not associated with a floor-ready merchandise strategy?

A) requiring large minimum order sizes
B) placing of special tags on merchandise
C) placing merchandise on hangers
D) pre-ticketing of merchandise

Question 38

A major disadvantage with a want book system used to gather information about consumer demand is that ________.

A) it only records preferences of current customers
B) it does not record vendor preferences
C) it does not record style or color preferences
D) its accuracy depends on salesperson input

Question 39

Which theft deterrent strategy can have a major negative impact on employee morale?

A) the use of security guards
B) the use of electronic article surveillance
C) the use of in-store cameras
D) offering rewards for employees that report co-workers involved in theft

Question 40

Direct store delivery works best with ________.

A) perishables
B) seasonal merchandise
C) fads
D) fashion merchandise

Question 41

Prior to establishing a quick response (QR)inventory planning system,suppliers need to rethink their ________.

A) credit terms and quantity discount schedule
B) quantity discount schedule and minimum order sizes
C) purchase prices and minimum order sizes
D) credit terms and minimum order sizes

Question 42

Which inventory management system results in longer-term retailer-vendor relationships and frequent reordering?

A) computer-based UPC scanning
B) automatic recording
C) quick response (QR) inventory planning
D) economic order quantity

Question 43

Third-party logistics is another term for ________.

A) outsourcing logistics
B) supply chain management
C) quick response inventory management
D) floor-ready merchandise

Question 44

Electronic data interchange (EDI)and floor-ready merchandise are important components of ________.

A) computer-based UPC scanning
B) reorder points
C) quick response (QR) inventory planning
D) economic order quantity

Question 45

Which of the following is not a major advantage of having a large inventory for a retailer?

A) quantity discounts in purchases
B) lower risk of obsolescence and deterioration
C) lower frequency of stockouts
D) low per-item shipping costs

Question 46

A manufacturer with low channel power may be able to get retailers to stock his or her goods through a ________.

A) uniform contract
B) negotiated contract
C) dated purchase
D) consignment purchase

Question 47

Opportunistic buying is most frequently used by ________.

A) specialty stores
B) department stores
C) membership clubs and off-price chains
D) category killers

Question 48

A disadvantage to the use of infrequent ordering in large quantities is ________.

A) loss of quantity discounts
B) high investment costs
C) high ordering costs
D) high transportation costs

Question 49

Which inventory management system in retailing corresponds to a just-in-time inventory management system?

A) computer-based UPC scanning
B) quick response (QR) inventory planning
C) automatic reordering
D) economic order quantity

Question 50

A retailer can shift labeling and handling functions to a manufacturer through the use of ________.

A) private labels
B) floor-ready merchandise
C) quick response (QR) inventory planning
D) Universal Product Codes

Question 51

An unsatisfactory evaluation may cause a retailer to reject an entire shipment.The retailer is using which form of merchandise evaluation?

A) sampling
B) inspection
C) description
D) statistical evaluation

Question 52

In order for quick response (QR)inventory planning to be effective,________.

A) inventory ordering costs need to be low
B) inventory holding costs need to be low
C) electronic data interchange must not be functioning
D) shipping costs must be reduced

Question 53

The purchase of out-of-season goods,manufacturer overruns,or cancelled orders by a closeout retailer illustrates ________.

A) inspection buying
B) channel power
C) opportunistic buying
D) scrambled merchandising

Question 54

Both consignment purchases and memorandum purchases enable a retailer to ________.

A) lower insurance costs
B) improve cash flow
C) reduce inventory levels
D) increase information flows

Question 55

The major difference between an inventory management system and a logistics system is that the ________.

A) inventory management system is more concerned with supplier-retailer linkages
B) inventory management system does not consider the impact of lost business due to stockouts
C) inventory management system also includes purchasing and customer service considerations
D) logistics system also includes purchasing and customer service considerations

Question 56

The major difference between a consignment purchase and a memorandum purchase is based on ________.

A) when title passes from seller to buyer
B) when an item is paid for
C) purchase price
D) eligibility for cooperative advertising allowances

Question 57

Excessive use of chargebacks by a retailer illustrates ________.

A) scrambled merchandising
B) the retail life cycle
C) channel power
D) channel cooperation

Question 58

The use of advanced ship notices is an important aspect of ________.

A) efficient consumer response (ECR)
B) third party logistics
C) floor-ready merchandise
D) economic order quantity computation

Question 59

A slotting allowance is a form of ________.

A) channel conflict
B) channel cooperation
C) short-run strategy by a manufacturer
D) electronic data interchange (EDI)

Question 60

Description buying is most frequently used for ________.

A) standardized, unbreakable merchandise
B) expensive, perishable merchandise
C) items purchased under new or special orders
D) expensive, one-time purchases

Question 61

A major difficulty with preventing theft of costly items by chaining items together (as with leather coats)is that these strategies ________.

A) have a negative effect on employee morale
B) impede sales of the affected items
C) do not reduce insurance costs
D) have limited effectiveness in reducing theft rates

Question 62

Inventory management planning is most difficult for ________.

A) fad products
B) mature products
C) growing products
D) staples

Question 63

The processing of returns and damaged goods is part of ________.

A) third-party logistics planning
B) slotting fees
C) quick response (QR) inventory planning
D) reverse logistics

Question 64

Opportunistic buying is common among off-price retailers.

Question 65

A retailer's risk is minimized in a consignment purchase.

Question 66

Logistics is a narrower concept than inventory management.

Question 67

Collaborative planning,forecasting,and replenishment (CPFR)and efficient consumer response relies upon supply chain management.

Question 68

Retailers can reduce the need for a central warehouse and for transferring goods after purchase through use of ________.

A) hub-and-spoke distribution systems
B) bonded warehouses
C) direct store delivery
D) public warehouses

Question 69

Which of the following illustrates reverse logistics?

A) a retailer handling a product recall for a manufacturer
B) a wholesaler implementing direct store distribution for a retailer
C) a manufacturer implementing vendor-managed inventory (VMI) for a retailer
D) a wholesaler shipping a replacement part directly to a final consumer

Question 70

Some retailers excessively use chargebacks as a means of getting price reductions from vendors.

Question 71

A major cost advantage associated with direct store delivery for a retailer is the ________.

A) mechanized processing of goods
B) reduction in warehouse expenses
C) efficient marking of merchandise
D) ease of returns

Question 72

An important source of information about consumer demand is the want book or want slip.

Question 73

Which of the following does not enable a retailer to reduce its inventory levels?

A) direct store delivery
B) floor-ready merchandise
C) memorandum purchases
D) quick response (QR) inventory planning

Question 74

Which strategy is the opposite of direct store distribution?

A) central warehousing
B) decentralized warehousing
C) third-party logistics providers
D) efficient consumer response

Question 75

A retailer found that inventory shrinkage rates varied greatly by department,as well as by merchandise item within departments.The retailer should consider using ________.

A) in-store cameras
B) point-of-sale computers
C) electronic article surveillance
D) burglar alarms

Question 76

Quick response (QR)inventory planning is generally used in conjunction with electronic data interchange.

Question 77

In quick response (QR)inventory planning,a retailer seeks to increase the average value of inventory on hand.

Question 78

Slotting allowances illustrate the high power large retailers have over major vendors.

Question 79

RFID is a similar concept to the UPC in identifying and keeping track of inventory.

Question 80

Effective employee theft deterrents include ________.

A) periodically testing burglar alarms
B) using iron gates and/or shatterproof glass on display windows
C) attaching expensive clothing together
D) locking up trash containers kept outside