Deck 10: Merchandise Management

Question 1

_____ is inventory that is in continuous demand by customers.

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

Answer 1

B

Question 2

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

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

Answer 2

E

Question 3

Which of the following is a good reason for adopting category management?

A) The merchandising functions for the category would be in the hands of several different buyers' staff
B) The store's assortment is represented by the "best" combination of sizes and vendors, that is, the one that will get the most profit from the allocated space
C) Every SKU within the category will be expected to generate an equal level of sales, profit, and turnover
D) The category captain can collude with the retailer to fix prices and block smaller brands from access to shelf space
E) All of these are good reasons

Answer 3

B

Question 4

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

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

Question 5

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

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

Question 6

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

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

Question 7

During the maturity stage of the category life cycle,:

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

Question 8

Which of the following best describes a fad?

A) A merchandise category that generates a lot of sales for a short time
B) A merchandise category that typically lasts several seasons
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) Inventory that can be described as basic merchandise

Question 9

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

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

Question 10

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

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

Question 11

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

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

Question 12

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

Question 13

Which of the following best describes a category?

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

Question 14

Which of the following are an example of staple merchandise?

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

Question 15

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

Question 16

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

Question 17

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

Question 18

Back during the 1950s,many young homebuyers purchased Danish modern furniture.Its light wood and clean lines were very popular for several years.It is no longer popular today,but it is still available.Danish modern is an example of a:

A) style
B) fashion
C) fad
D) staple
E) seasonal merchandise item

Question 19

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

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

Question 20

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) Merchandise management is selling the right merchandise at the right time.
D) After financial objectives are set, buying decisions are made.
E) All of these are true.

Question 21

Each buyer may buy several categories of merchandise.Within each category are SKUs.Which of the following are examples of a SKU at a bookstore?

A) Mystery novels by P.D. James
B) Paperback books
C) First-edition novels
D) Travel books
E) None of these

Question 22

What is a drawback of utilizing a category captain?

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

Question 23

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

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

Question 24

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

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

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 ______,the store has no product breadth.

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

Question 26

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

Question 27

Top management sets the merchandise direction for the company by:

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

Question 28

Where are you most likely to find staple merchandise?

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

Question 29

Which of the following is an example of a merchandise group?

A) Girls' Levi jeans
B) Pre-teen accessories
C) Toddler's apparel
D) Cannon towels
E) Women's ready-to-wear

Question 30

_____________ is the number of SKUs within a category.

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

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

Question 32

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

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

Question 33

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

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

Question 34

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

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

Question 35

An example of seasonal merchandise is:

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

Question 36

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) Category manager
C) Category captain
D) Category specialist
E) Consumer advocate

Question 37

Monty's Men's Wear sells ties made of silk,wool,cotton,and linen,in many colours,styles,and lengths.In terms of ________,the store has tremendous depth.

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

Question 38

Which of the following best describes variety?

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

Question 39

Which of the following is an example of a SKU?

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

Question 40

A stock keeping unit is:

A) a group of items of similar merchandise
B) the merchandise unit used for merchandise budget planning
C) a group of complementary products
D) the smallest unit available for keeping inventory
E) a term used to describe the average quantity of monthly inventory

Question 41

A(n)__________________ is a list of merchandise that indicates in very general terms what the retailer wants to carry in a particular merchandise category.

Question 42

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

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

Question 43

Shrinkage can:

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

Question 44

In a shoe store retail establishment,Nine West,sling-back,black,two inch heel,size 7 is an example of a(n)____________.

Question 45

A(n)_________________________ is a merchandise category that generates a lot of sales for a relatively short time-often less than a season.

Question 46

The number of SKUs within a category is called the _______________.

Question 47

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

Question 48

The highest classification level in the buying organization is called the ___________.

Question 49

_________________ is an inventory reduction that is caused by shoplifting by employees or customers,by merchandise being misplaced or damaged,or by poor bookkeeping.

Question 50

_______________ is the number of different merchandising categories within a store or department.

Question 51

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 is called ______________.

Question 52

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) seasonal stock
D) safety stock
E) staple stock

Question 53

A vendor who forms an alliance with a retailer to help gain consumer insight,satisfy consumer needs,and improve performance and profit potential across an entire category is called a(n)__________________.

Question 54

What is lead time?

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

Question 55

Managing a retail business with the objective of maximizing the sales and profits of a category is called _____________.

Question 56

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

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

Question 57

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

Question 58

The second division in a retailer's merchandising organization classification scheme is the _____________.

Question 59

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

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

Question 60

The smallest unit available for keeping inventory control is called a(n)___________.

Question 61

How can increasing assortment adversely affect customers?

Question 62

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

Question 63

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

Question 64

What is the difference between variety and assortment?

Question 65

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

Question 66

What is a potential problem with establishing a category captain?

Question 67

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

Question 68

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

Question 69

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

Question 70

When a buyer is _________________,it means she's running out of stock on particular sizes.

Question 71

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

Question 72

What is a category life cycle?

Question 73

List the classification levels of the standard merchandise classification scheme.

Question 74

The percentage of demand for a particular SKU that is satisfied is referred to as _________.

Question 75

Imagine a retail chain that sells CDs and cassette tapes 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 76

What is the difference between merchandise management and category management?

Question 77

What does 70 percent product availability mean from a practical point of view?

Question 78

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

Question 79

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