Deck 15: Implementing Merchandise

Question 1

Which of the following is not a logistics-based performance goal?

A)efficiently placing merchandise on the sales floor
B)effectively coordinating shipments from various suppliers
C)effectively minimizing markdowns through timing markdowns
D)effectively returning damaged goods to their vendor

Answer 1

C

Question 2

A regular order is characterized by _____.

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

Answer 2

D

Question 3

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

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

Answer 3

D

Question 4

An advantage of maintaining a large inventory is _____.

A)customer satisfaction
B)a high stock turnover rate
C)fresh merchandise
D)low insurance costs

Question 5

An example of an item that should be evaluated by a retailer that uses inspection is _____.

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

Question 6

Which statement concerning RFID (radio frequency identification)is not correct?

A)RFID is an alternative to the use of Universal Product Codes.
B)Implementation costs for RFID are low.
C)At present,the use of RFID by retailers is limited.
D)RFID better enables a retailer to track inventory than UPC-based systems.

Question 7

A merchandise mart can be best defined as a _____.

A)trade show featuring multiple suppliers that takes place in major cities
B)permanent vendor showroom
C)temporary vendor showroom
D)resident buying office

Question 8

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

Question 9

A slotting fee is a form of _____.

A)manufacturer-based channel power
B)retailer-based channel power
C)channel cooperation
D)promotional allowance

Question 10

A logistics system can be best defined as the _____.

A)reduction of inventory in a system through more rapid reordering of goods in lower quantities
B)use of a paperless,computer-to-computer relationship between retailers and their vendors
C)total process of planning,implementing,and coordinating the physical movement of merchandise from a manufacturer (wholesaler)to a customer in the most timely 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 11

The logistics aspect of a value delivery chain is _____.

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

Question 12

A retailer can most effectively track consumer purchases through _____.

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

Question 13

Which of the following is not a merchandise source?

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

Question 14

In a formal buying organization,the most valuable source of information in implementing merchandise plans is _____.

A)competitors
B)trade associations
C)the consumer
D)suppliers

Question 15

A deduction from a bill made by a retailer due to such infractions as late shipping or improper labeling is called a _____.

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

Question 16

Unlike other methods of inventory management,logistics _____.

A)is concerned with the flow of information via paperless means
B)regards order processing,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

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 18

A disadvantage of maintaining a small inventory is _____.

A)high storage costs
B)high chance of deterioration
C)the high chance of stockouts
D)high insurance costs

Question 19

Opportunistic buying is most commonly utilized by _____.

A)full-line discount houses
B)off-price retailers
C)supermarkets
D)specialty stores

Question 20

A chargeback is a form of _____.

A)manufacturer-based channel power
B)retailer-based channel power
C)channel cooperation
D)promotional allowance

Question 21

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

A)ordering goods in large quantities
B)use of direct store delivery
C)use of electronic data interchange with key vendors
D)supply chain management initiatives with key suppliers

Question 22

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 23

A major problem associated with the use of want books (want slips)is that this technique _____.

A)requires a sophisticated data base
B)relies on retail salespeople to enter the relevant information
C)requires a computer-based retail information system
D)requires electronic data interchange capability

Question 24

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 25

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
C)applied procurement planning
D)electronic data interchange

Question 26

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

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

Question 27

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 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

Efficient consumer response (ECR)is an example of _____.

A)electronic data interchange
B)floor-ready merchandise
C)third-party logistics
D)collaborative planning,forecasting,and replenishment

Question 30

According to a major study of inventory shrinkage,_____.

A)vendors' short shipping accounts for the major cause of inventory shrinkage
B)customers steal more than employees
C)employees account for more inventory shrinkage than customers
D)electronic article surveillance is not an effective deterrent of inventory shrinkage

Question 31

A major difference in outbound logistics for store-based versus Web-based retailers is the need for Web-based retailers to _____.

A)decentralize warehousing
B)work closely with suppliers to ensure timely receipt of merchandise by the retailer
C)ensure that products are delivered to final customers
D)utilize floor-ready merchandise

Question 32

Which source of merchandise utilizes vertical integration by a retailer?

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

Question 33

A department store requires its ladies suit vendors to pre-ticket garments,press them,and place them on hangers.The strategy most directly describes which policy?

A)logistics management
B)electronic data interchange
C)floor-ready management
D)efficient consumer response

Question 34

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

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

Question 35

What dollar amount in U.S.retail sales is lost each year due to employee theft,customer shoplifting,and vendor theft?

A)$15 billion
B)$45 billion
C)$75 billion
D)$100 billion

Question 36

The primary difference between a merchandise mart and a trade show is based on _____.

A)cost
B)location
C)membership requirement
D)permanence

Question 37

Which of the following is not a cause of inventory shrinkage?

A)markdowns due to stale merchandise
B)theft by employees
C)shoplifting by consumers
D)administrative errors by vendors (such as short weighing)

Question 38

The use of shopping bots is associated with _____.

A)want books (want slips)
B)third-party logistics
C)comparison shopping
D)merchandise marts

Question 39

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
D)electronic article surveillance

Question 40

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

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

Question 41

A slotting allowance is a form of _____.

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

Question 42

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 43

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 44

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

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

Question 45

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 allowance
C)slotting fee
D)chargeback

Question 46

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

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

Question 47

Description buying by a retailer is most appropriate for _____.

A)jewelry
B)art
C)antiques
D)branded goods

Question 48

Description buying is most frequently used for _____.

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

Question 49

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 inventory planning
D)economic order quantity

Question 50

Third-party logistics is another term for _____.

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

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)description
C)inspection
D)statistical evaluation

Question 52

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

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

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

A quick response (QR)inventory management system seeks to _____.

A)decrease inventory ordering costs
B)decrease delivery lead time from vendors
C)increase the quantity discounts available to a retailer
D)decrease inventory holding costs

Question 55

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

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

Question 56

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 57

Which full-service merchant wholesaler carries a very deep assortment?

A)general merchandise
B)specialty merchandise
C)drop shipper
D)cash-and-carry

Question 58

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 59

Excessive use of chargebacks by a retailer illustrates _____.

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

Question 60

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 61

In inspection,individual items are sampled for their quality and condition.

Question 62

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

Question 63

The use of RFID (radio frequency identification)is an alternative to the Universal Product Code (UPC).

Question 64

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 65

Which of the following illustrates reverse logistics?

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

Question 66

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

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

Question 67

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

Question 68

Inventory management planning is most difficult for _____.

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

Question 69

Inventory management planning is easiest for _____.

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

Question 70

The use of quick response inventory planning,electronic data interchange,and logistics planning by supermarkets is referred to as _____.

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

Question 71

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

Question 72

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

Question 73

As compared with direct store delivery,a major advantage to the use of central warehousing is the _____.

A)need for lower overall inventory levels
B)need for extra handling for perishables
C)ability to easily shift goods from one retail location to another
D)increased capability for quick response inventory planning

Question 74

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

Question 75

Which strategy is the opposite of direct store delivery?

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

Question 76

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 77

The most valuable source of information in implementing merchandise plans is the final consumer.

Question 78

Effective employee theft deterrents include _____.

A)alternating the direction of hangers on merchandise near exits
B)using iron gates and/or shatterproof glass on display windows
C)inspecting all packages brought into the store
D)locking up trash containers kept outside

Question 79

The first step in implementing merchandise plans is selecting and interacting with merchandise sources.

Question 80

Opportunistic buying is common among off-price retailers.