89) Total inventory costs are reduced when the small business manager spends her time and
effort controlling items that represent the greatest inventory value.
Topic: The ABC Method of Inventory Control
AACSB: Analytic Skills
90) Choosing the most appropriate system of inventory control eliminates the need for the small
business owner to conduct a periodic physical inventory count.
Topic: Physical Inventory Count
AACSB: Analytic Skills
91) Small business owners using the ABC system of inventory control need not worry about
conducting a physical inventory count.
Topic: The ABC Method of Inventory Control
AACSB: Analytic Skills
92) Because they keep continuous track on each item added to or taken from inventory, perpetual
inventory control systems eliminate the need for a physical inventory count.
Topic: Physical Inventory Count
AACSB: Analytic Skills
93) Simon counts a few items of his inventory every week, working his way through the entire
inventory during the year. Simon is using cycle counting to control his inventory.
Topic: Physical Inventory Count
AACSB: Analytic Skills
94) Cloud-based systems enable business owners to track their inventories and to place orders
with vendors quickly and with few errors by linking them to their vendors electronically.
Topic: Physical Inventory Count
AACSB: Use of IT
21
95) For changes in inventory management to be considered consistent with a “just-in-time”
philosophy they must use both EDI and POS technology to manage the inventories.
Topic: Just-In-Time (JIT) Inventory Control Techniques
AACSB: Use of IT
96) “Just-in-time” inventory control techniques are best suited for manufacturing operations
where there are significant inventory levels and where the manufacturing operations are unique
and varied, producing custom items.
Topic: Just-In-Time (JIT) Inventory Control Techniques
AACSB: Analytic Skills
97) One force driving the move to JIT inventory management is competition among companies
to provide excellent customer service.
Topic: Just-In-Time (JIT) Inventory Control Techniques
AACSB: Analytic Skills
98) The radical change involved in JIT II is that suppliers’ employees work onsite with the
customer’s plant and there is a sharing of what is normally confidential information.
Topic: Just-In-Time II Techniques
AACSB: Analytic Skills
99) JIT II in the retail and service industries is more commonly called efficient customer
response.
Topic: Just-In-Time II Techniques
AACSB: Analytic Skills
100) Small business owners should avoid cutting prices on slow-moving items since it is better
to hold onto them and try to sell them later at normal prices.
Topic: Turning Slow-Moving Inventory into Cash
AACSB: Analytic Skills
22
101) Carrying unsold inventory from one year to the next is senseless since it represents an
investment earning no return and it ties up working capital that could be put to more productive
uses.
Topic: Turning Slow-Moving Inventory into Cash
AACSB: Analytic Skills
102) Research shows that the nature of the business contributes to its vulnerability to crime.
Topic: Protecting Inventory from Theft
AACSB: Analytic Skills
103) The greatest criminal threat to small business is from professional crooks in the form of
shoplifters, fraudulent insurance sales, and computer scams.
Topic: Employee Theft
AACSB: Analytic Skills
104) Participants in a study on fraud losses estimate that they lose about 6% of their annual
revenues to employee theft and fraud.
Topic: Employee Theft
AACSB: Analytic Skills
105) Generally speaking, it is not the “workaholic” employee but the one who seems to be
hanging around a lot who is a risk factor for employee theft.
Topic: What Causes Employee Theft?
AACSB: Analytic Skills
106) If an owner or his/her relatives take the product home without properly logging it out,
employees will perceive that it is okay and will be more likely to “steal” from the company in
this way.
Topic: What Causes Employee Theft?
AACSB: Analytic Skills
23
107) Both unreasonable rules and un-enforced rules are equally harmful to small business
security.
Topic: What Causes Employee Theft?
AACSB: Analytic Skills
108) Small businesses have had employees steal by putting merchandise in the trash, take it out,
and then return to the dumpster and remove it after their shift is over.
Topic: What Causes Employee Theft: The Physical Breakdown
AACSB: Analytic Skills
109) Doing daily inspections of the cash register tape to check for employee theft are of little
value since the theft would have already taken place and it would be difficult to trace and prove
at that point.
Topic: Preventing Employee Theft
AACSB: Analytic Skills
110) Keeping internal records current is a simple but effective deterrent to employee theft.
Topic: Preventing Employee Theft: Establish a System of Internal Controls
AACSB: Analytic Skills
111) Many incidents of employee theft go undetected, and only a small percentage of those
employees who are caught stealing are prosecuted.
Topic: Preventing Employee Theft
AACSB: Analytic Skills
112) Approximately 6% of the average price tag in a small business is there due to shoplifting
losses.
Topic: Shoplifting
AACSB: Analytic Skills
24
113) Owners do not need to prosecute juvenile shoplifters when they are caught, as the scare of
getting caught is often enough to make them stop.
Topic: Type of Shoplifter: Juveniles
AACSB: Analytic Skills
114) Surprisingly, kleptomaniacs account for nearly 9% of all small business retail losses.
Topic: Type of Shoplifter: Kleptomaniacs
AACSB: Analytic Skills
115) When watching for shoplifters, owners should remember that impulse shoplifters tend to
work alone while juveniles and professionals work in groups.
Topic: Deterring Shoplifters
AACSB: Analytic Skills
116) The best way to deal with shoplifting is to take steps to prevent it rather than stress catching
the shoplifter in the act.
Topic: Deterring Shoplifters
AACSB: Analytic Skills
117) A valuable shoplifting reduction technique is to train employees on what to watch for in
potential shoplifters.
Topic: Deterring Shoplifters: Train Employees to Spot Shoplifters
AACSB: Analytic Skills
118) Generally, training employees is more expensive than the losses to shoplifting but if
employees are trained shoplifters will eventually leave your store alone.
Topic: Deterring Shoplifters: Train Employees to Spot Shoplifters
AACSB: Analytic Skills
119) How the store is laid out has little impact on shoplifting unless video cameras are installed
as well.
Topic: Deterring Shoplifters: Pay Attention to the Store Layout
AACSB: Analytic Skills
25
120) 98% of the time, shoplifters are successful in their thefts.
Topic: Apprehending Shoplifters
AACSB: Analytic Skills
121) To make shoplifting charges stick, two of the things the owner/employee needs to be able to
do is to identify the merchandise as belonging to the store and that it was not paid for.
Topic: Apprehending Shoplifters
AACSB: Analytic Skills
122) Small business owners should always prosecute and not worry about negative publicity or
legal entanglements.
Topic: Apprehending Shoplifters
AACSB: Analytic Skills
123) Juveniles account for approximately one-fifth of all shoplifters.
Topic: Types of Shoplifters
AACSB: Analytic Skills
124) Impulse shoplifters steal on the spur of the moment when they succumb to temptation.
Topic: Types of Shoplifters
AACSB: Analytic Skills
125) Shoplifters motivated to steal to support a drug or alcohol habit are usually hard to detect
because their behavior is usually stable and consistent.
Topic: Types of Shoplifters
AACSB: Analytic Skills
126) Kleptomaniacs have a compulsive need to steal even though they have little, if any, need for
the items they shoplift.
Topic: Types of Shoplifters
AACSB: Analytic Skills
26