The _____ method of merchandise planning requires that, in addition to a base stock
level, there will be a variable amount of inventory that will increase or decrease at the
beginning of each sales period.
a. base level
b. base BOM contribution
c. basic stock
d. stock-to-sales
e. average stock
Art’s Appliances has accounts payable of $65,000, payroll payable of $2,750, mortgage
payable of $38,500, current notes payable of $12,000, and taxes payable of $3,100.
Art’s current liabilities are:
a. $12,000
b. $38,500
c. $82,850
d. $121,350
e. $178,900
The difference between a retailer’s planned purchases and the retailer’s open-to-buy is:
a. merchandise that the retailer has already ordered, but has not received.
b. the discounts offered by vendors on earlier purchases.
c. reductions to be taken later in the selling period.
d. the difference between the BOM and EOM stock levels.
e. A retailers planned purchases is always equal to the retailer’s open-to-buy.
Which of the following statements about private label brands is false?
a. Private labels allow the retailer to control the costs associated with developing,
making, sourcing, and promoting the label.
b. Private labels are advertised in the newspaper as brands and are heavily promoted in
stores.
c. Private label brands are usually sold at lower prices than manufacturer’s brands.
d. Private label brands have been successful in the grocery industry, while failing in
most other retail sectors.
e. Some retailers can’t use private labels unless they are part of a buying group.
The _____ (IRS) is the ratio of demand for a product divided by the available supply.
a. index of retail stores
b. index of retail sales
c. index of responsible selling
d. index of retail space
e. index of retail saturation
Common examples of sole-sponsored sales promotions include:
a. coupons.
b. product demonstrations.
c. contests and sweepstakes.
d. sampling.
e. in-store-displays.
When two discount department stores such as Sears and JCPenney compete for the
same customer, what type of competition is occurring?
a. Intertype
b. Conceptual
c. Divertive
d. Intercept
e. Intratype
Holly’s Arts and Crafts had a retail inventory available for sale of $700,000, while sales
were $210,000, markdowns were $5,000 and discounts were $2,000. What is the ending
inventory at retail?
a. $490,000
b. $483,000
c. $485,000
d. $693,000
e. $695,000
When a retailer’s actual results fall short of planned results, North America’s retailing
philosophy is to place blame on:
a. external factors.
b. management/employees.
c. the economy.
d. merchandisers.
e. decline in target markets.
The three concepts of interorganizational management that a retail executive needs to
understand are dependency, _____, and conflict.
a. trouble-shooting
b. interorganizational transfers
c. power
d. chain of command
e. personalities
Although there are exceptions, as a general rule _____ distribution is associated with
_____ goods.
a. intensive; shopping
b. selective; convenience
c. selective; specialty
d. exclusive; shopping
e. exclusive; specialty
The physiologically-based stimulus to stay warm in the cold is an example of a:
a. cue.
b. drive.
c. goal.
d. want.
e. demand.
If a retailer with an ROA of 7.0 percent decides to increase its financial leverage ratio
from 1.5 times to 2.0 times, which of the following results will occur?
a. The retailer’s ROA will increase by 33 percent.
b. The retailer’s RONW will decrease by 33 percent.
c. The retailer’s RONW will go from 10.5 percent to 14.0 percent.
d. The retailer’s RONW will increase by .5 percent.
e. The retailer’s RONW will increase by 10.5 percent.
The salesperson may present convincing arguments for considering a number of criteria
when the customer has:
a. explicit choice criteria.
b. well-defined choice criteria.
c. no active product choice criteria.
d. inadequate or vague choice criteria.
e. choice criteria in conflict.
_____ are services provided to the customer prior to entering the store.
a. Promotional management
b. Pretransaction services
c. Advertising expenditures
d. Posttransaction services
e. Promotional services
If a retailer has a 25 percent gross-margin percentage, how much will be generated in
gross-margin dollars for each $100 of sales?
a. $25.00
b. $75.00
c. $2.50
d. $4.50
e. $7.50
Percentage markup on selling price equals:
a. markup/cost.
b. initial markup – maintained markup.
c. percentage markup on selling price/(100 percent – percentage markup on selling
price).
d. (percentage markup on cost)/(100 percent + percentage markup on cost).
e. 100 percent – percentage markup on cost.
During the _____era, the retailer began to view itself as a support system for all of its
stakeholders with the customer at the center.
a. ‘marketing to’
b. ‘marketing from’
c. ‘marketing with’
d. ‘marketing without’
e. ‘to market’
A _____ business district is smaller than a central business district (CBD) and revolves
around at least one department or variety store at a major street intersection.
a. secondary
b. substandard
c. community
d. suburban
e. neighborhood
Facilitating institutions may best be described as specialists that:
a. while not taking title, still perform marketing functions for supply chain members.
b. create new markets for the manufacturer.
c. serve as the supply chain leaders.
d. perform functions supply chain members cannot legally perform.
e. eliminate conflict from the supply chain.
Some consumers will pay higher-than-average prices for specialty items.
Promotional advertising attempts to bolster short-term performance by using product
availability and price as a selling point.
The use of suggestion selling always increases the customer’s satisfaction with the
retailer.
While many different vendor selection criteria are discussed in the text, a product’s
country of origin continues to lose importance as customers now think in terms of a
global, rather than national, scale.
A retailer’s planned purchase for a particular month are equal to the retailer’s planned
sales reductions, and desired EOM minus the retailer’s BOM for that month.
Poorly managed operations can positively affect a retailer’s profitability.
The function of the customer service and sales enhancement audit is to suggest new
things to management that customers want.
A retailer’s home page on the Internet is equivalent to a local retailer’s storefront.
Selling time may involve time spent writing up the sales receipts, marking merchandise,
organizing merchandise, or demonstrating merchandise to the customer.
Neutral experiences are what can create an overall great experience.