Test 2

The quick ratio equals ________. A) (cash + accounts receivable) divided by total current liabilities B) total assets divided by annual net sales C) total assets divided by total liabilities D) current assets total current liabilities

A) (cash + accounts receivable) divided by total current liabilities

The distance between city A and city B is 30 miles; city A's population is 1,000,000 and city B's is 16,000,000. The point of indifference between the two cities is ________. A) 6 miles from A, 24 miles from B B) 12 miles from A, 18 miles from B C) 18 miles from A, 12 miles from B D) 24 miles from A, 6 miles from B

A) 6 miles from A, 24 miles from B

The trading area overlap between two shoe stores of the same chain is significant. What conclusion can we make about the level of saturation in this geographic area? A) It is overstored. B) It is understored. C) It is saturated. D) Both stores are parasite stores.

A) It is overstored.

A retailer's assets, liabilities, and net worth are summarized at a specific period of time in a ________. A) profit-and-loss (income) statement B) balance sheet C) strategic profit model D) product/market opportunity matrix

B) balance sheet

A separate store organization should be utilized when ________. A) branches are small and customer tastes are similar B) branches are large and customer tastes vary by location C) buying and selling functions need to be differentiated D) stock needs to be transferred among branches

B) branches are large and customer tastes vary by location

Planned shopping centers are characterized by ________. A) low rental costs B) central ownership and management and balanced tenancy C) no adjacent retailers D) a high concentration of office buildings and retail stores

B) central ownership and management and balanced tenancy

In the main store control organization, ________. A) decentralization is practiced B) centralization is practiced C) merchandise managers are placed in branch stores D) each branch has autonomy for merchandising and operations

B) centralization is practiced

A retailer seeking a stable economic environment should seek a trading area with a ________. A) large retired population B) diversified economic base C) large government facility D) booming economy

B) diversified economic base

An area's commercial and industrial structure is referred to as its ________. A) lambda coefficient B) economic base C) trading area D) industrial diversification base

B) economic base

Based on Reilly's law, a city with a population of 90,000 would draw people from about how many times the distance as a city with 10,000 population? A) 1.5 times B) 2 times C) 3 times D) 4 times

C) 3 times

A retailer with a higher than average profitability is most likely to have which level of saturation? A) overstored B) understored C) oversaturated D) saturated

B) understored

Which statement concerning the central business district (CBD) is not correct? A) The core of a CBD rarely exceeds a square mile. B) A CBD is typically located in the part of a city or town with the greatest concentration of office buildings and retail stores. C) Over the past 40 years, the share of the CBD relative to the planned shopping center has increased. D) A CBD has at least one major department store and a broad grouping of specialty and convenience stores.

A) The core of a CBD rarely exceeds a square mile.

A retailer structures and assigns tasks, policies, resources, authority, responsibilities, and rewards through ________. A) a retail organization B) human resource management C) an organization chart D) job enlargement

A) a retail organization

) Under the modern version of the Mazur plan, which executive has responsibility for reaching profit goals? A) buyer B) store operations manager C) publicity director D) director of sales

A) buyer

Which are examples of fixed assets to a retailer? A) cash, inventory on hand, and accounts receivable B) buildings, store fixtures, and real-estate C) accounts receivable, sales tax receipts before required payments, and fixtures D) inventory on order, fixtures, and accounts receivable

A) cash, inventory on hand, and accounts receivable

Which of the following retailers is most likely to be a parasite in a major shopping center? A) coffee shop B) electronic repair facility C) department store D) clothing specialty retailer

A) coffee shop

Which form of retail organization separates responsibility for buying and selling? A) equal store B) separate store C) main store control D) modern version of the Mazur plan

A) equal store

Which trading area covers the greatest distance? A) fringe trading area B) secondary trading area C) primary trading area D) satellite trading area

A) fringe trading area

The equal store organization is a form of ________. A) geographic classification B) product classification C) functional classification D) combination organization chart

A) geographic classification

Reporting relationships among employees within a retail firm from the lowest levels to the highest levels are described in the ________. A) hierarchy of authority B) job description C) management by objectives D) management by exception

A) hierarchy of authority

Which unplanned business district is generally bounded by the intersection of two major streets? A) isolated store B) string C) secondary business district D) central business district

A) isolated store

A retailer can overcome problems with extreme task specialization by ________. A) job rotation and job enlargement B) raising employee salaries C) developing a child care center D) reprimanding employees for lateness

A) job rotation and job enlargement

The four functional areas in the modern version of the Mazur plan are ________. A) merchandising, communications, store management, and financial accounting B) merchandising, store operations, accounting, and finance C) product, price, promotion, and distribution D) buying, selling, store operations, and accounting

A) merchandising, communications, store management, and financial accounting

The least common form of planned shopping center is the ________. A) neighborhood shopping center B) community shopping center C) megamall D) string

A) neighborhood shopping center

Which planned shopping center emphasizes convenience-oriented goods and services (such as a bakery, laundry, and a dry cleaner)? A) neighborhood shopping center B) community shopping center C) regional shopping center D) megamall

A) neighborhood shopping center

A retailer has the greatest control over property maintenance in which rental form? A) net lease B) straight lease C) graduated lease D) maintenance-increase-recoupment lease

A) net lease

The return on net worth (RONW) ratio is based on a retailer's ________. A) net profit margin and financial leverage B) net profit margin and asset turnover C) net profit margin, asset turnover, and financial leverage D) gross profit margin and operating costs as a percent of sales

A) net profit margin and financial leverage

When a central business district closes a street to vehicular traffic as part of a renovation project, it plans to simulate a(n) ________ mall. A) open B) closed C) discount D) enclosed

A) open

A retailer is currently in a shopping center with a large number of vacancies. Several of the vacant retail locations have high affinities with the existing retailer. The loss in pedestrian traffic can be partially offset through which form of lease? A) percentage lease B) graduated lease C) net lease D) maintenance-increase-recoupment lease

A) percentage lease

Which type of shopping center is comprised of category killer stores? A) power center B) regional shopping center C) megamall D) string

A) power center

A retailer's revenues and expenses for a given period of time are summarized in a ________. A) profit-and-loss (income) statement B) balance sheet C) strategic profit model D) product/market opportunity matrix

A) profit-and-loss (income) statement

A department store uses a(n) ________ computer site selection model. This model contains a series of equations linking variables such as traffic patterns, population size, average income, and transportation adequacy to estimated sales. A) regression B) analog C) gravity D) historical analogy

A) regression

The major difference between an application blank and a weighted application blank is that the weighted application blank is ________. A) scored to determine if a job candidate meets the minimum cutoff point B) verified by the use of a polygraph C) completed by the interviewer D) verified by checking listed references

A) scored to determine if a job candidate meets the minimum cutoff point

The quality of pedestrian traffic counts can be improved by ________. A) separating the count by time of day and day of week B) counting all people passing a given location C) counting only people who park their car in the lot D) allowing the interviewer to determine who is to be counted

A) separating the count by time of day and day of week

A neighborhood business district generally is comprised of a minimum of ________. A) several service stores (such as a dry cleaner and restaurant) B) one department store and a group of specialty and convenience stores C) a grouping of stores with similar merchandise lines D) a junior department store, variety store, and several service shops

A) several service stores (such as a dry cleaner and restaurant)

A major benefit of a trading-area analysis is that it allows a retailer to determine ________. A) the demographic and socioeconomic characteristics of consumers B) a store's image C) the psychographics of shoppers versus nonshoppers D) the response of shoppers to promotional pricing

A) the demographic and socioeconomic characteristics of consumers

A major advantage of ownership versus leasing is ________. A) the increased ability to predict occupancy costs in future time periods B) the ability to purchase superior locations in major shopping centers C) lower capital requirements D) lower financial risk

A) the increased ability to predict occupancy costs in future time periods

A major advantage of an isolated store location is that ________. A) there are no group rules which must be abided by in operation B) parking and security costs can be shared with other tenants C) shoppers can be easily attracted and maintained at the location D) advertising costs are generally low

A) there are no group rules which must be abided by in operation

An area with a relatively large number of consumers per square foot of available store space is ________. A) understored B) overstored C) saturated D) oversaturated

A) understored

The first step in choosing a store location is to ________. A) determine whether to locate as an isolated store, in an unplanned business district, or in a planned shopping center B) evaluate alternate geographic (trading areas) in terms of the characteristics of residents and existing retailers C) select the general isolated business district or planned shopping-center location D) analyze alternate sites contained in the specified retail location type

B) evaluate alternate geographic (trading areas) in terms of the characteristics of residents and existing retailers

A span of control refers to the number of subordinates reporting to one manager. A firm with a large span of control utilizes a ________ organization. A) tall B) flat C) functional D) centralized

B) flat

In Reilly's law of retail gravitation, the point of indifference is the ________. A) customer's perceived similarity between two competing retailers B) geographic breaking point area at which shoppers are indifferent to shopping at either of two cities C) limit of a city's trading area in estimated driving time D) limit of a city's primary trading area in driving distance

B) geographic breaking point area at which shoppers are indifferent to shopping at either of two cities

An isolated store location is most suitable to a retailer that ________. A) is a parasite B) is a category killer C) requires affinities D) uses a multiple segmentation strategy

B) is a category killer

A store has a disproportionately large primary, secondary, and fringe trading area. This situation can be caused by ________. A) a high level of prices B) its being a destination store C) physical barriers D) high competition in each trading area

B) its being a destination store

Which shopping location appeals to a single residential area? A) secondary business district B) neighborhood business district C) regional shopping center D) central business district

B) neighborhood business district

The relationship between a retailer's net profits and net sales is its ________. A) asset turnover B) net profit margin C) operating costs D) cost of goods sold

B) net profit margin

A string is composed of ________. A) a supermarket and several service stores (such as a bakery, dry cleaner, and laundromat) B) one department store and a group of specialty and convenience stores C) a grouping of stores with similar or compatible product lines D) a junior department store, variety store, and several service shops

B) one department store and a group of specialty and convenience stores

A newspaper stand in a hotel lobby can best be described as a ________ store. A) fringe B) parasite C) destination D) convenience

B) parasite

Which location and site evaluation aspects can best be monitored by observation? A) transportation quality as judged by consumers B) pedestrian and vehicular traffic C) parking adequacy perceptions D) retail balance

B) pedestrian and vehicular traffic

A retailer uses different buyers in its main store and its suburban branches so as to better reflect each target market. This illustrates which job classification method? A) geographic classification B) product classification C) functional classification D) combination classification

B) product classification

A major advantage of a flat organization is ________. A) top management's frequent contact with employees B) quicker response time to the handling of important problems or opportunities C) the existence of many levels of supervision D) fewer employees reporting to each manager

B) quicker response time to the handling of important problems or opportunities

) Which planned shopping center type has a trading area of up to 30 minutes driving time? A) megamall B) regional shopping center C) community shopping center D) neighborhood shopping center

B) regional shopping center

In a string location, a retailer has affinities with ________. A) compatible retailers B) retailers selling the same product lines C) a parasite store D) a planned shopping center

B) retailers selling the same product lines

A functional classification for a car dealer would classify jobs into which of the following divisions? A) subcompact, compact, and SUV B) sales promotion, repairs, car sales, and store operations C) new car, new truck, used car, used truck D) main dealership and branch dealership locations A, B, and C

B) sales promotion, repairs, car sales, and store operations

Transferring stock between branches is most difficult in which form of retail organization? A) equal store B) separate store C) main store control D) multiline retail organization

B) separate store

Which form of organization is most in accord with the notion of motivation that argues that the average worker dislikes responsibility and prefers to be led? A) flat B) tall C) functional D) decentralized

B) tall

The minimum expectations/desired goals concept is most closely in accord with ________. A) the notion that only economic inducements really motivate employees B) the notion that employees can be self-managers and assigned authority C) high-task specialization D) a tall organization

B) the notion that employees can be self-managers and assigned authority

Leases for retail locations are often very complicated due to ________. A) governmental regulations on permitted rent increases B) their long time duration C) the uncertain cost of interest over the lease time period D) the possibility of tenant bankruptcy

B) their long time duration

Blocks and census tracts are important units in the Census of Population to retailers because ________. A) online computer tapes are available B) these can be combined to fit a retailer's trading area C) these blocks and tracks contain important data on retail sales by location D) these blocks and tracks contain forecasts on population changes over a 5-year period

B) these can be combined to fit a retailer's trading area

A retailer with a supervisory orientation that assumes that the average worker lacks ambition and dislikes responsibility would most likely employ a ________. A) loosely structured supervision style B) tightly structured supervision style C) flat organization D) policy of promotion from within

B) tightly structured supervision style

Which statement concerning the U.S. Census Bureau's national digital map, TIGER, is not correct? A) TIGER incorporates all streets and highways in the United States. B) TIGER files are available free-of-charge. C) TIGER maps include retail facilities and population characteristics. D) Enhancements to TIGER are available from independent software firms.

C) TIGER maps include retail facilities and population characteristics.

A shopping area in a city or town that is the hub of retailing in a city and is synonymous with the term "downtown" is the ________ business district. A) unplanned B) neighborhood C) central D) secondary

C) central

A store with a wide assortment of merchandise and a strong image in a particular merchandise category is a ________ store. A) variety B) department C) destination D) parasite

C) destination

What type of retailer has a very large primary trading area? A) impulse retailer B) convenience retailer C) destination retailer D) parasite store

C) destination retailer

A retailer seeks input from employees at weekly meetings. Data on store performance is shared with employees and employees are rewarded on the basis of sales per square foot and a store's net profit as a percent of sales. This best illustrates ________. A) minimum expectations B) desired goals C) dissatisfiers D) a tall organization

C) dissatisfiers

A retailer decided to outsource its logistics operations to FedEx after studying its resources. This illustrates which stage in setting up a retail organization? A) integrating positions through an organization chart B) classifying jobs C) dividing the tasks among channel members D) grouping the retailer's tasks into jobs

C) dividing the tasks among channel members

A problem with extreme specialization of tasks in retailing is ________. A) high training costs B) difficulty in hiring personnel with necessary skills C) employees not being aware of the importance of their tasks to the retailer's overall goals D) the difficulty of clearly defining job-related tasks

C) employees not being aware of the importance of their tasks to the retailer's overall goals

A retailer seeking to decrease its collection period should ________. A) decrease the frequency of mailing credit statements B) reduce its debt through the sale of common stock C) encourage slow-paying customers to use bank credit cards D) sell assets to convert them to cash

C) encourage slow-paying customers to use bank credit cards

Which form of retail store organization seeks to achieve the benefits of both centralization and decentralization? A) modern version of the Mazur plan B) separate store C) equal store D) main store control

C) equal store

A major advantage to leasing (versus store ownership) is ________. A) the ability to depreciate a building B) lower property taxes C) freedom from lease renewal concerns D) the ability to secure regional shopping center locations

C) freedom from lease renewal concerns

The ________ method of job classification places store-based personnel under the direct control of the branch manager. A) functional B) interdivisional C) geographic D) product

C) geographic

The gathering of information about the functions and requirements of each job is referred to as ________. A) a traditional job description B) a goal-oriented job description C) job analysis D) the hierarchy of authority

C) job analysis

Which planned shopping center is generally arranged in a strip? A) regional shopping center B) community shopping center C) neighborhood shopping center D) megamall

C) neighborhood shopping center

A retailer should concentrate the bulk of its promotional activity in its ________. A) fringe trading area B) secondary trading area C) primary trading area D) satellite trading area

C) primary trading area

Which planned shopping center is most similar to the central business district? A) community shopping center B) neighborhood shopping center C) regional shopping center D) string

C) regional shopping center

A major disadvantage to an isolated store location is that ________. A) competition with adjacent retailers is high B) on an ongoing basis, many people will not travel very far to shop in just one store C) rental costs are generally relatively high D) leases can restrict store operations and merchandise carried

C) rental costs are generally relatively high

A disadvantage of delegating a retail task to another party is ________. A) that the designated party may be able to automate the task B) that the target market may not desire the task C) the loss of control over the activity D) that the designated party may conduct the same task for noncompeting retailers

C) the loss of control over the activity

A proposed location for a supermarket chain is within three miles of a current store. What is the major factor that management should study relative to both locations? A) the trading area of the current location B) the trading area of the proposed location C) the trading-area overlap of both locations D) the demographics of the trading area of each location

C) the trading-area overlap of both locations

A retailer's location strategy can be made more flexible through ________. A) sale and leaseback arrangements with financial institutions B) ownership versus long-term leasing C) the use of short-term leases with multiple renewal options versus a long-term lease D) the use of a maintenance-increase-recoupment provision

C) the use of short-term leases with multiple renewal options versus a long-term lease

A retailer with three retail stores located within a 10-mile radius wishes to advertise in a county-based daily newspaper which covers a very large geographic area. The retailer should ________. A) use small ads to minimize waste B) use horizontal cooperative advertising to reduce waste C) use a regional edition to minimize waste D) seek to reduce the trading-area overlap to minimize waste with this medium

C) use a regional edition to minimize waste

Which job selection technique requires that a job candidate score above a minimum cutoff as a pre-condition for being hired? A) goal-oriented job description B) application blank C) weighted application blank D) job analysis

C) weighted application blank

Which computer-based system classifies and describes communities by lifestyle clusters? A) American Community Survey B) Editor & Publisher Market Guide C) Nielsen Researcher D) Nielsen's PRIZM

D) Nielsen's PRIZM

What type of economic base is preferred by most retailers? A) upper-income economic base B) service-oriented economic base C) single-industry economic base D) diversified economic base

D) diversified economic base

A retailer uses a functional classification system for jobs; in addition, some employees may be placed in special teams. An employee with two bosses (the functional boss and the team leader) ________. A) is in an equal store organization B) is in a flat organization C) is in a tall organization D) does not have a clear hierarchy of authority

D) does not have a clear hierarchy of authority

The modern version of the Mazur plan most closely corresponds to which method of classifying jobs? A) combination organization chart B) product classification C) geographic classification D) functional classification

D) functional classification

A retailer can increase its financial leverage through ________. A) selling common stock B) leasing rather than purchasing assets C) reducing operating expenses D) increasing short- and long-term debt

D) increasing short- and long-term debt

The least flexible element of a retailer's strategy mix is ________. A) merchandise assortment B) human resources C) pricing D) location

D) location

Which two lease provisions set rental terms on the basis of actual operating costs? A) percentage lease and straight lease B) graduated lease and percentage lease C) graduated lease and straight lease D) maintenance-increase-recoupment lease and net lease

D) maintenance-increase-recoupment lease and net lease

A retailer's net worth is also referred to as its ________. A) current assets plus fixed assets B) net assets C) present value of assets D) owner's equity

D) owner's equity

A major advantage of specialization is ________. A) the need for fewer employees B) the generation of broad-based potential managers C) less employee boredom D) reduced training

D) reduced training

A megamall is a form of a ________. A) central business district B) string C) community shopping center D) regional shopping center

D) regional shopping center

A major refinement in Huff's law versus Reilly's law is Huff's use of ________. A) mileage versus driving time estimates B) a point of indifference between two areas C) actual population figures versus population estimates D) separate trading-area calculations for different product categories

D) separate trading-area calculations for different product categories

"A grouping of stores may actually increase the trading area for each store." This statement especially applies to ________. A) convenience products B) emergency products C) impulse products D) shopping products

D) shopping products

A firm can increase its asset turnover performance by ________. A) lowering rental costs through use of low-cost warehouse-type locations B) reducing labor expense through centralized operations C) increasing liabilities to lower the asset base D) stocking inventory that is fast-moving

D) stocking inventory that is fast-moving

The addition of retail stores to a shopping center increases the trading area for each store. This indicates that ________. A) trading-area overlap exists between the old and new retailers B) the retail area is saturated C) the new stores are parasites D) store affinities exist between the new and existing stores

D) store affinities exist between the new and existing stores

In retail balance, ________. A) there is a shortage of a given type of retail facility B) the level of customer interchange among complementary stores is high C) parking facilities are appropriate to demand D) store facilities for each merchandise or service classification are equal to the location's market potential

D) store facilities for each merchandise or service classification are equal to the location's market potential

"While competition among similar stores can increase the size of a trading area for all merchants, it can result in each merchant receiving a smaller market share." This statement is most applicable to a(n) ________. A) isolated location B) category killer retailer C) department store D) string

D) string

A major advantage of the Census of Population for use by retailers in trading-area analysis is ________. A) its currency B) its five-year projections of key economic data C) the availability of retail sales data by merchandise classification D) the availability of information on small geographic units

D) the availability of information on small geographic units

A firm determines that job candidates for part-time cashier positions that have B or better averages are three times more likely to successfully complete six months with a firm than those with averages less than C. Where in the human resource management process should the firm use this information? A) job description B) goal-oriented job description C) application blank D) weighted application blank

D) weighted application blank

Under what condition would it be rational for the trading areas of two branch locations to completely overlap? A) when each store has the same target market B) when the retailer desires cost economics in promotion C) when a retailer pursues a mass marketing strategy D) when the retailer decides to switch store locations due to loss of a lease on the first store location

D) when the retailer decides to switch store locations due to loss of a lease on the first store location