Ch 12

After a retailer forecasts sales for a merchandise category, the next step is to develop a(n) ______, which consists of the set of stock-keeping units (SKUs) the merchant will offer in that category in each of its stores and from its website. A. assortment plan B. vendor management inventory C. merchandise distribution plan D. control system for managing inventory

A

An apparel store is developing forecasts for its fashion merchandise categories. It monitors the customer transactions for each day and identifies customers to contact. Service representatives of the store then speak to these selected customers over the telephone and ask them what they liked and/or disliked about the merchandise in the store. In this scenario, the retail store is using a(n) ______ to conduct market research. A. in-depth interview B. focus group C. mystery shopper D. category captain

A

Gross margin return on inventory investment (GMROI) is equal to what? A. Gross margin percentage × Sales-to-stock ratio B. Gross margin percentage × Asset turnover C. Net profit margin × Asset turnover D. Net profit margin × Sales-to-stock ratio

A

Identify the accurate statement about managing merchandise categories. A. Managing merchandise by category can help ensure that a store's assortment includes the best combination of sizes and vendors. B. Managing merchandise within a brand category is the most efficient way to proceed, because it tends to consider the interdependencies among SKUs in the category. C. A buyer's decision about promoting a specific SKU in a category does not affect the sales of other SKUs in the same category. D. Changing the price of one SKU in a merchandise category does not influence the sales of other SKUs in the same category.

A

The percentage of the demand for a particular stock-keeping unit (SKU) that is satisfied is referred to as A. product availability. B. breadth of merchandise. C. cycle stock. D. merchandise assortment.

A

What type of analysis is used to determine which SKUs should be in the assortment plan and how much backup stock and resulting product availability are provided for each SKU in the plan? A. ABC analysis of assortments B. sell-through analysis C. zoning analysis D. multiattribute analysis of vendors

A

When editing the assortment for a particular category, the buyer considers all of the following EXCEPT what? A. the number of competitors selling the same category B. the physical characteristics of the store C. the effect of assortments on GMROI D. the firm's retail strategy

A

Which three things are considered when making decisions regarding merchandise allocation? A. the type of merchandise to allocate B. the amount of merchandise to allocate to each store C. the timing of merchandise allocation D. number of sales associates per store E. the number of stores a retailer has

A, B, C

Which of the following elements are addressed in an inventory control system? A. inventory levels B. merchandise orders C. merchandise deliveries D. warehouse profitability E. merchandise sales

A, B, C, E

Which of these are used as the basis for a merchandise budget plan for fashion merchandise? A. the level of inventory needed to support the sales and achieve the desired GMROI objectives B. the sales forecast C. the number of units sold in previous years D. the planned discounts to employees and customers

A, B, D

What tactics can service providers use to manage demand efficiently so that it meets but does not exceed capacity? A. making appointments B. having customers wait in a queue C. taking reservations D. selling advance tickets for events

A, C, D

Which of these skills does a merchandise manager need? A. knowing when to make adjustments in price and inventory levels B. being able to choose retail locations that will be profitable C. being able to analyze sales data D. staying in touch with what customers want to buy

A, C, D

What sources of information do retailers use to develop forecasts for fashion merchandise categories? A. vendors B. historical sales budgets C. fashion trend services D. market research E. previous sales data

A, C, D, E

After a plan has been developed for managing merchandise inventory in a category, what is the next step in the merchandise management process? A. Develop a forecast for category sales. B. Allocate the purchased merchandise to the stores. C. Determine the variety and assortment for each category. D. Establish a control system to manage stock.

B

Fred is one of four senior vice presidents of Gray Horse Inc., a chain of department stores. He makes decisions about the management of inventory and oversees the responsibilities of the divisional merchandise managers and buyers. Fred belongs to the ______ group in the organization. A. department B. merchandise C. category D. classification

B

How does product availability affect a retailer? A. A retailer loses sales and possibly customers if the level of backup stock for a particular stock-keeping unit is high. B. A retailer's inventory investment significantly increases if the level of product availability is very high. C. A retailer's gross margin return on inventory investment (GMROI) increases if product availability for a particular stock-keeping unit is too high. D. A retailer can increase product availability for a particular stock-keeping unit by decreasing the level of backup stock.

B

Identify the accurate statement about fashion merchandise. A. Unlike staple merchandise, fashion merchandise is never categorized as seasonal merchandise. B. For fashion items, there often is no opportunity to increase or decrease the quantity ordered before the selling season has ended. C. Fashion merchandise categories are also known as basic merchandise categories. D. Typically, fashion merchandise is in continuous demand over an extended time period.

B

Retail chains typically classify each of their stores based on what factor? A. square footage of the store B. annual sales C. store location D. number of SKUs

B

The ______ is used by retailers to analyze the benefits they might gain from deleting, adding, or keeping certain items in their assortments. A. zoning analysis B. SKU rationalization program C. vertical integration strategy D. Huff gravity model

B

What is the first step in the merchandise management process? A. Allocate merchandise for stores. B. Forecast category sales. C. Develop an assortment plan. D. Buy merchandise.

B

In which two ways can buyers increase GMROI? A. Decrease gross margin. B. Increase gross margin. C. Increase inventory turnover. D. Decrease sales-to-stock ratio.

B, C

In the merchandise planning process, which of these are likely to occur during the monitoring and adjustment step? A. SWOT analysis B. ABC analysis of assortments C. multiattribute analysis of vendors D. sell-through analysis

B, C, D

Which of these describe the typical inventory control system for a staple merchandise category? A. The control system operates so efficiently that the store has no need to carry backup stock. B. The category is managed by an automated continuous replenishment control system. C. The control system constantly monitors the inventory level of each SKU in the store. D. An SKU is reordered automatically when the inventory falls below a predetermined level.

B, C, D

Which of these mean the same thing as product availability? A. product assortment B. level of support C. safety stock D. service level E. buffer stock

B, D

How do service retailers differ from fashion retailers? A. Offerings provided by service retailers function the same way as staple merchandise. B. Every offering provided by service retailers is imperishable in nature. C. Offerings provided by service retailers perish more quickly than those of fashion retailers. D. Sales made by service retailers are always seasonal.

C

Identify the accurate statement about fashion merchandise. A. Unlike staple merchandise, fashion merchandise is never categorized as seasonal merchandise. B. Typically, fashion merchandise is in continuous demand over an extended time period. C. For fashion items, there often is no opportunity to increase or decrease the quantity ordered before the selling season has ended. D. Fashion merchandise categories are also known as basic merchandise categories.

C

Identify the true statement about the model stock plan. A. Retailers need not consider the product availability for each stock-keeping unit to determine their model stock plans. B. The model stock plan requires less backup stock if a retailer wants to increase product availability. C. Retailers typically have different model stock plans for the different store sizes in a chain. D. The model stock plan cannot be implemented by multichannel retailers.

C

Projecting past sales trends into the future while making adjustments for any anticipated factors, such as promotions and weather, is the approach for forecasting what type of sales? A. fashion merchandise, such as women's clothing B. seasonal merchandise, such as swimwear C. staple merchandise, such as items in a supermarket D. fashion merchandise, such as athletic shoes

C

Retailers alter their merchandise allocations to account for the "paycheck cycle" by Blank______ at the beginning of the month. A. extending operating hours B. offering steeper discounts on items C. promoting larger package sizes D. displaying smaller, less expensive packages

C

Retailers often allocate merchandise based on when consumers get paid from their jobs. This is known as A. markdown money. B. a merchandise budget plan. C. the paycheck cycle. D. the order point.

C

The ______ is the highest classification level in the merchandise classification scheme. A. category group B. department group C. merchandise group D. classification group

C

The process of determining the breadth and depth for a merchandise category is called what? A. getting the lead out B. visual merchandising C. editing the assortment D. ABC analysis

C

What is the objective of an inventory control system? A. Maximize the amount of backup stock on hand so stockouts will not occur. B. Increase the amount of both buffer and safety stock on hand. C. Minimize the amount of inventory on hand but still have merchandise available when customers want it. D. Reduce the percentage of product availability for any given category.

C

What type of inventory control system is typically used in a staple merchandise category? A. just-in-time order and delivery B. open-to-buy C. automated continuous replenishment D. merchandise budget plan

C

Identify the accurate statement about managing merchandise categories. A. Managing merchandise within a brand category is the most efficient way to proceed, because it tends to consider the interdependencies among SKUs in the category. B. A buyer's decision about promoting a specific SKU in a category does not affect the sales of other SKUs in the same category. C. Changing the price of one SKU in a merchandise category does not influence the sales of other SKUs in the same category. D. Managing merchandise by category can help ensure that a store's assortment includes the best combination of sizes and vendors.

D

Projecting past sales trends into the future while making adjustments for any anticipated factors, such as promotions and weather, is the approach for forecasting what type of sales? A. fashion merchandise, such as women's clothing B. seasonal merchandise, such as swimwear C. fashion merchandise, such as athletic shoes D. staple merchandise, such as items in a supermarket

D

The ______ is the highest classification level in the merchandise classification scheme. A. category group B. department group C. classification group D. merchandise group

D

The number of different merchandising subcategories offered to customers is referred to as the ______ of merchandise. A. depth B. assortment C. width D. variety

D

The objective of ______ is to increase inventory turnover by reducing the number of items available for sale without reducing sales. A. an ABC analysis B. a multiattribute analysis C. continuous replenishment D. a SKU rationalization program

D

What is gross margin return on inventory investment (GMROI)? A. a combination of gross margin percentage and total assets B. gross margin percentage divided by sales-to-stock ratio C. a financial ratio of a retailer's asset turnover and net profit margin percentage D. a financial ratio that assesses a buyer's contribution to return on assets

D

When allocating merchandise to stores, which of the following is TRUE? A. The stores with the best sales staff rarely get the most inventory. B. The stores with the best location typically receive the most inventory. C. The stores with the smallest square footage must get their inventory from bigger stores. D. The stores with the largest sales volume typically receive the most inventory.

D

In the merchandise planning process, once a buyer has decided what type and how much merchandise should be allocated to each store, what would be the NEXT step?

Negotiate with vendors and buy the merchandise.

True or false: Service retailers devise approaches for managing demand for their offering to ensure that demand does not exceed capacity.

True

Typically, staple merchandise categories

are in continuous demand over an extended time period.

A(n) ___ plan is the set of stock-keeping units (SKUs) that a retailer will offer in a merchandise category in each of its stores and from its website.

assortment

Staple merchandise categories are also called

basic merchandise category

The ___ management approach to managing merchandise assigns one buyer or manager to oversee all merchandising activities for an entire assortment of similar items.

category

The ____ interview is an unstructured personal interview in which the interviewer uses extensive probing to get individual respondents to talk in detail about a subject.

in-depth

Improving inventory turnover and increasing gross margin

increases GMROI.

Fred is one of four senior vice presidents of Gray Horse Inc., a chain of department stores. He makes decisions about the management of inventory and oversees the responsibilities of the divisional merchandise managers and buyers. Fred belongs to the ______ group in the organization.

merchandise

The ___ plan specifies the amount of merchandise in dollars (not units) that needs to be delivered during each month, based on the sales forecast, the planned discounts to employees and customers, and the level of inventory needed to support the sales and achieve the desired GMROI objectives.

merchandise budget

The process by which a retailer attempts to offer the appropriate quantity of the right products, in the right place and at the right time, so that it can meet the company's financial goals is called

merchandise management

The ___ plan is the number of each stock-keeping unit (SKU) in the assortment plan that the buyer wants to have available for purchase in each store.

model stock

A(n) ___ analysis compares actual and planned sales to determine whether more merchandise is needed to satisfy demand or whether price reductions are required.

sell-through

The approach for forecasting sales of ____ merchandise is to project past sales trends into the future, while making adjustments for any anticipated factors.

staple

The breadth of a retailer's merchandise is also known as the ___ of merchandise.

variety