FM225-213 Midterm Review
All the following are goals of database marketing EXCEPT a) targeting promotional offerings to specific customers b) increasing the cost of new customer acquisition c) decreasing customer defections d) strengthening the store-customer relationship
b) increasing the cost of new customer acquisition
Buyers compare their quantitative performance against all the following EXCEPT a) past records for the department or store b) individual markup percentages c) established goals d) industry averages
b) individual markup percentages
In a broad and shallow assortment, the store is offering a) many brands, many sizes b) many brands, few sizes c) few brands, many sizes d) few brands, few sizes
b) many brands, few sizes
Pure play retailers a) operate stores in the mall and kiosks b) operate only online c) operate in a clicks-and-mortar environment d) operate only bricks-and-mortar stores
b) operate only online
All the following are trends in the U.S. market EXCEPT a) a "graying" of America has occurred b) population growth has declined c) a "browning" of America has occurred d) population growth has shifted south.
b) population growth has declined
The reason that many retailers may not survive in the future will probably be caused by: a) an increase in the number of retail competitors b) resistance to change c) customers becoming less empowered d) drastically increasing rents at mall locations
b) resistance to change
Which of the following publications would give a buyer the best information about current fashion trends? a) Glamour b) USAToday c) Business Week d) Forbes
a) Glamour
Which one of the following "green" activities by customers has occurred the MOST frequently? a) Installing energy-efficient light bulbs b) Purchasing emery-efficient appliances c) Purchasing electric cars d) Installing low-flow plumbing fixtures
a) Installing energy-efficient light bulbs
Which stage of the product life cycle is dominated by innovators? a) Introduction b) Decline c) Growth d) Maturity
a) Introduction
Which one of the following is NOT a selection factor buyers would consider when developing assortment plans? a) Markup b) Price c) Brand d) Size
a) Markup
A customer always purchasing a car at the same dealership would be an example of which type of buying motive? a) Patronage b) Convenience c) Rational d) Emotional
a) Patronage
At most retail stores individual markup percentage is calculated by dividing markup by a) department sales b) retail price of the item c) cost of the item d) stock turnover
b) retail price of the item
A customer purchasing a new TV after spending weeks researching the product would be an example of a(an) a) shopping product b) specialty product c) convenience product d) impulse product
b) specialty product
Which characteristic typically does NOT describe a big-box store? a) Places little reliance on technology b) Offers little customer service c) Presents a low-price image to customers d) Carries merchandise that is not fashion forward
a) Places little reliance on technology
Large national retailers would MOST likely use which type of buying office? a) Private b) Merchandise broker c) Salaried d) Fixed-fee
a) Private
What type of trends are related to consumers' lifestyles, attitudes and opinions? a) Psychographic b) Behavioristic c) Self-actualization d) Demographic
a) Psychographic
Which one of the following is NOT an example of external sources used by buyers? a) Sales associates b) Vendors c) Customers d) Magazines and trade publications
a) Sales associates
Which social media strategy allows users to share images or video for a brief period of time? a) Snapchat b) Twitter c) Facebook d) Email
a) Snapchat
Who is the largest retailer in the United States? a) Walmart b) Costco c) Target d) Home Depot
a) Walmart
When a store is overbought, all of the following should be effective strategies EXCEPT a) decrease amount of sales promotions b) provide better training of sales associates c) increase amount of markdowns d) cancel outstanding orders, if possible
a) decrease amount of sales promotions
A customer purchasing candy as they wait in line at the cash register would be an example of a(n) a) impulse product b) specialty product c) shopping product d) durable product
a) impulse product
The amount of basic merchandise that must be on hand or on order at any reordering point is the a) maximum b) reorder amount c) minimum d) open-to-buy
a) maximum
If the open-to-buy is less than a buyer needs to offer an adequate assortment, the store has a) overbought b) underbought c) increased markdowns too much d) priced merchandise too low
a) overbought
Buyers increasingly recognize that _____ is (are) the best indicator of future buying patterns. a) past customer behavior b) national sales figures c) data warehousing d) clustering
a) past customer behavior
The first and most important part of the six-month merchandising plan is forecasting a) planned sales b) planned BOM c) planned EOM d) planned reductions
a) planned sales
The markdown percentage is determined by dividing dollar markdowns by a) total sales b) customer returns c) profit d) markdown cancellations
a) total sales
In a six-month merchandising plan, EOM stock for any month is a) calculated by dividing average inventory by sales b) the planned BOM for the following month c) the planned BOM for the previous month d) calculated by dividing sales by average inventory
b) the planned BOM for the following month
Brief summaries of a buyer's dealings with each vendor is a(n) a) contact diary b) vendor diary c) vita d) criteria list
b) vendor diary
A buyer is purchasing 60 sweatshirts in the following proportions: 1/3 hooded and 1/3 nonhooded. How many hooded sweatshirts will be purchased? a) 60 b) 30 c) 20 d) 40
c) 20
Which is the most popular online site based on the number of unique visitors? a) Walmart.com b) Apple.com c) Amazon.com d) eBay.com
c) Amazon.com
Which of the following retailers is BEST positioned as a destination store? a) Sears b) Dillard's c) Apple d) Macy's
c) Apple
When developing next year's sales forecast, the most important information source would be a) economic conditions b) demographic trends c) past sales records d) competition's promotion plans
c) past sales records
Retailers who offer concessions in their stores a) offer customers with a loyalty card extra discounts b) increase floor space for top-selling vendors c) provide a snack bar for customers d) allow vendors to take over selling space on the floor.
c) provide a snack bar for customers
All the following economic indicators would lead buyers to forecast higher sales EXCEPT a) increase in new home construction b) increase in unemployment claims c) increase in consumer confidence d) decrease in commodity prices
b) increase in unemployment claims
In the future, jobs in retail buying are predicted to a) decrease slightly b) increase slightly c) remain stable d) double
b) increase slightly
Planned purchases at cost is calculated by multiplying planned purchases at retail by a) 100% + Initial Markup % b) 100% + Initial Markdown % c) 100% - Initial Markdown % d) 100% - Initial Markup %
d) 100% - Initial Markup %
A small business that sells mainly basics reorders every two weeks for item #3467. Three weeks are required for delivery. If the weekly sales rate of the item is 25, what is the maximum? a) 50 b) 75 c) 25 d) 125
d) 125
If the dollar value of stock on hand is $100,000 and sales are $50,000, what is the stock-sales ratio? a) 0.5 b) 10.0 c) 5.0 d) 2.0
d) 2.0
An item costs the retailer five dollars. If it sells for ten dollars, what was the markup percentage based on retail? a) 75 percent b) 100 percent c) 25 percent d) 50 percent
d) 50 percent
All of the following activities would build strong retailer-vendor relationships EXCEPT a) Providing feedback to vendors on how well their products have sold in the buyer's store b) Being prompt in keeping appointments c) Communicating with the vendor on a regular basis d) Cancelling orders after their cancellation date
d) Cancelling orders after their cancellation date
Based on the profit/loss formula, which of the following strategies would NOT increase profit? a) Increase sales b) Decrease cost of goods sold c) Decrease operating expenses d) Increase cost of goods sold
d) Increase cost of goods sold
Equatoriale is a buying office located in which country? a) France b) Germany c) China d) Italy
d) Italy
Which of the following activities would LEAST likely be performed by a buying office for clients? a) Following up and checking on deliveries b) Recommending hot items c) Locating new resources d) Making decisions on what products to purchase
d) Making decisions on what products to purchase
Which type of vendor services client stores themselves where special merchandising techniques are needed? a) Merchant middleman b) Nonmerchant middleman c) Wholesaler d) Rack jobber
d) Rack jobber
Most wearable technology has been developed for an individual's a) feet b) legs c) head d) arms
d) arms
Successful affinity analysis by buyers results in a) better math algorithms for calculating markdowns b) higher prices than the competition c) more private brands being included in the product assortment d) better in-store product adjacencies
d) better in-store product adjacencies
All the following reasons can cause a low stock turnover EXCEPT a) wrong merchandise has been purchased b) merchandise may be priced too high c) product assortment is too wide d) sales have increased
d) sales have increased
The stock-sales ratio is calculated by dividing the dollar value of stock by a) stock turnover b) shrinkage c) unit sales d) sales in dollars
d) sales in dollars
Major forces affecting the retailing environment include all the following EXCEPT: a) omnichannel retailing b) social media c) mobile technologies d) growth of bricks-and-mortar stores
D) growth of bricks-and-mortar stores
Last month a department had $100,000 in sales. This year sales totaled $110,000. What was the percentage increase/decrease? a) 10% b) -9% c) -10% d) 9%
a) 10%
A buyer is purchasing 100 sweaters in the following proportions: 60% cotton, 30% wool, and 10% poly blend. How many wool sweaters will be purchased? a) 30 b) 60 c) 10 d) 100
a) 30
Which type of product assortment for apparel will customers probably find late in the selling season? a) Broad and shallow b) Narrow and deep c) Extensive breadth d) Extensive depth
a) Broad and shallow
What occurs when potential sales of existing products decrease because new products have been added to the assortment? a) Cannibalization b) Decreased markdowns c) Increased profits d) Elastic demand
a) Cannibalization
What is the profit/loss if net sales were $100,000, cost of goods sold were $50,000, and operating expenses were $45,000? a) $105,000 b) $5,000 c) $55,000 d) $150,000
b) $5,000
Last month's BOM was $60,000 and EOM was $40,000. Sales for the month were $25,000. What was the stock turnover? a) 2.0 b) 0.5 c) 0.4 d) 1.6
b) 0.5
The movie Flashdance caused an increase in the sales of which product? a) White suits b) Active wear c) Black leather jackets d) Trench coats
b) Active wear
Which of the following products would NOT be classified a durable product? a) Furniture b) Clothing c) Appliances d) Automobiles
b) Clothing
Which stage of the product life cycle is dominated by laggards? a) Introduction b) Decline c) Growth d) Maturity
b) Decline
What is the trend on the number of buying offices in the United States? a) Remaining stable b) Decreasing c) Increasing d) Insufficient data available
b) Decreasing
Which of the following products would probably have a higher stock turnover? a) Blue jeans b) Jewelry c) Bridal gowns d) Furniture
b) Jewelry
Which one of the following products would be classified as seasonal basics? a) Men's ties b) Kites c) White socks d) Blue jeans
b) Kites
Which performance measurement is calculated as the difference between merchandise cost and its selling price? a) Open-to-buy b) Markup c) Profit d) Stock-sales ratio
b) Markup
Before making purchases, a buyer's plan will usually be approved by whom? a) Assistant buyer b) Merchandise manager c) Fashion forecaster d) Fashion coordinator
b) Merchandise manager
Why have socks become one the fastest growing segments in men's apparel? a) More retailers are offering socks for sale b) More colors and styles have been added to the assortment c) Retail prices have decreased drastically d) Socks are being produced with newer and better materials
b) More colors and styles have been added to the assortment
Which one of the following is the BEST example of primary data for a retail store? a) Using reports from a trade journal b) Questioning customers about which zip code they live in c) Using survey results reported in the local newspaper d) Obtaining census data from the internet
b) Questioning customers about which zip code they live in
Which one of the following is NOT considered a reduction on the merchandise plan? a) Shrinkage b) Sales c) Markdowns d) Employee discounts
b) Sales
When identifying trends, which type of data do most buyers typically use? a) Electronic b) Secondary c) External d) Primary
b) Secondary
Which type of vendor distribution policy exists when they only sell to a few retailers in a trading area? a) Exclusive b) Selective c) Mass d) Broad
b) Selective
Handling merchandise reorders and purchasing some basic merchandise would be usually conducted by a) assistant department managers. b) assistant buyers c) fashion coordinators d) merchandise managers
b) assistant buyers
As soon as they are hired, new buyers should a) immediately seek new vendors with whom to do business b) carefully analyze the performance of all vendors c) select vendors who provide bigger gifts to the buyer d) choose vendors from family and friends
b) carefully analyze the performance of all vendors
When a store is overbought, all of the following usually result EXCEPT a) decreased maintained markup b) decreased markdowns c) decreased profit d) decreased stock turnover
b) decreased markdowns
Unbranded items in plain packages which receive little promotional support are a) private labels b) generics c) private brands d) haute couture
b) generics
Generally, applicants lose out on a job in retail buying for all the following reasons EXCEPT a) lack of goals and objectives b) inability to write computer programs that forecast sales c) lack of enthusiasm and drive d) poor scholastic record
b) inability to write computer programs that forecast sales
Which of these newspaper headlines would probably cause a buyer to increase a sales forecasts? a) Stocks end the month 5 percent lower b) Wholesale apparel prices increase by 5 percent c) Consumer confidence index increases by 5 percent d) Local population declines by 5 percent
c) Consumer confidence index increases by 5 percent
In recent years, what has been the trend in retail sales at department stores? a) Increasing b) Insufficient data available c) Decreasing d) Remaining stable
c) Decreasing
Which personality trait does a buyer exhibit by showing perseverance? a) Vision b) Creativity c) Drive d) Enthusiasm
c) Drive
Planned BOM inventory can be calculated by multiplying the stock-sales ratio by a) planned sales b) stock turnover c) EOM inventory d) value of stock
c) EOM inventory
Which one of the following is NOT a private brand? a) Craftsman b) DieHard c) Firestone d) Kenmore
c) Firestone
Which one of the following retailers would LEAST LIKELY use the warehouse requisition plan? a) Target b) Walmart c) Forever 21 d) Kroger
c) Forever 21
Which one of these retailers would least likely use a wholesaler? a) Walmart b) Target c) Forever 21 d) Ace Hardware
c) Forever 21
What is the largest ethnic group in the United States today? a) Asian-Americans b) Chinese c) Hispanics d) African-Americans
c) Hispanics
The buyer for a small women's wear chain would most likely deal with which type of vendor? a) Wholesaler b) Rack jobber c) Manufacturer's representative d) Merchant middleman
c) Manufacturer's representative
Which one of these characteristics does NOT describe discount department stores? a) Product assortment is concentrated on the fastest-selling merchandise b) National brands are sold at low prices c) Many salespeople are available to offer service to consumers d) Self-service is the norm
c) Many salespeople are available to offer service to consumers
Which function in a retail store involves product purchasing? a) Control b) Promotion c) Merchandising d) Operations
c) Merchandising
Offering one brand of men's shirts in five colors would be an example of which type of assortment plan? a) Broad and shallow b) Narrow and shallow c) Narrow and deep d) Narrow depth
c) Narrow and deep
What is the correct formula for calculating profit/loss before taxes? a) Net Sales + Cost of Goods Sold = Gross Margin + Operating Expenses b) Net Sales - Cost of Goods Sold = Gross Margin + Operating Expenses c) Net Sales - Cost of Goods Sold = Gross Margin - Operating Expenses d) Net Sales + Cost of Goods Sold = Gross Margin - Operating Expenses
c) Net Sales - Cost of Goods Sold = Gross Margin - Operating Expenses
Which of the following duties would least likely be performed by an assistant buyer? a) Prepare daily reports to identify slow sellers b) Complete markdown records and reports c) Plan and select merchandise assortments d) Replenish basic stock
c) Plan and select merchandise assortments
Satisfying a consumer's physiological needs would be an example of what type of buying motive? a) Patronage b) Convenience c) Rational d) Emotional
c) Rational
When a wholesaler or other intermediary is used in distribution, what happens to retail prices? a) They decrease b) There is no impact c) They may double d) They increase
c) They may double
Which characteristic typically does NOT describe Generation Z? a) They are technologically advanced b) They cannot imagine life without cell phones c) They rely on email for communications d) They desire instant gratification
c) They rely on email for communications
Which of the following is the BEST example of a quantitative performance goal? a) To sell enough to make a profit b) To increase sales from last month c) To achieve a monthly sales goal of $50,000 d) To increase sales from the same month last year
c) To achieve a monthly sales goal of $50,000
Which one of the following is a type of centralized buying? a) Functional merchandising plan b) Departmentalized merchandising plan c) Warehouse requisition plan d) National price agreement plan
c) Warehouse requisition plan
Which one of the following items is LEAST often purchased online? a) Food b) Books c) Appliances d) Clothing
c) appliances
Stock turnover is calculated by dividing sales by a) stock-sales ratio b) BOM inventory c) average stock d) unit sales
c) average stock
Reverse showrooming involves: a) customers purchasing a product in-store where they can touch and feel it b) customers research a product at a bricks-and-mortar store before purchasing it online c) customers researching a product online before purchasing it in-store d) customers purchasing a product online without ever visiting a bricks-and-mortar store.
c) customers researching a product online before purchasing it in-store
If a merchandise plan is used successfully, all the following outcomes should occur EXCEPT a) decreased markdowns b) minimized inventory investment c) decreased turnover d) maximized profit
c) decreased turnover
Attempting to offer an assortment plan which includes too many selection factors in relation to the buyer's budget will probably result in a) increased profits b) better in-stock positions c) dissatisfied customers d) no markdowns
c) dissatisfied customers
All the following are future retailing trends EXCEPT a) bricks-and-mortar stores becoming mini-fulfillment centers b) social media efforts being measured more effectively c) elimination of risk from buyers' forecasts d) increasing use of data analytics by retailers
c) elimination of risk from buyers' forecasts
Products that enter the marketplace quickly, are heavily purchased, and have sales that quickly decline are a) busts b) flops c) fads d) seasonal staples
c) fads
Vendors who handle most of a buyer's business are a) brokers b) exclusive vendors c) key resources d) primary vendors
c) key resources