Which of the following typically determines the amount and type of compensation paid
by an employer?
A. Organizational culture
B. Market conditions
C. Organizational tradition
D. Brand strategy
E. Marketing plan
Answer:
Digger’s shoe department was a successful part of the store. Always busy, Digger
encourages his commission based salespeople to satisfy the customers’ needs and sell,
sell, and sell. As a result, the stockroom was a horrible mess by the end of the day. What
should Digger do to get the commissioned employees to help with this mess?
A. Increase their salary.
B. Increase their commission percentage.
C. Change employees from commission to hourly wages.
D. Change employees from commission to salary.
E. Combine a salary with a commission.
Answer:
Which of the following is NOT a benefit of a high inventory turnover?
A. Continuous availability of new merchandise
B. Improved salesperson morale
C. Reduced obsolescence risk and markdowns
D. New buying opportunities
E. Reduced gross margin
Answer:
Which of the following segmentation methods would be most appropriate for a retailer
selling MP3 players mainly targeting college students?
A. Geographic segmentation
B. Buying situation segmentation
C. Demographic segmentation
D. Benefit segmentation
E. Personality segmentation
Answer:
The amount paid for the merchandise by the retailer is the:
A. cost of goods sold.
B. gross margin.
C. operating expense.
D. fixed expense.
E. variable expense.
Answer:
When Lana went to Bookdreams.com to look for books on health and wellness, she saw
a personalized greeting and books recommendations. The greeting and books
recommendations were based on her previous visits to the site. Which of the following
best describes how Bookdreams.com knew that Lana has accessed their site?
A. Bookdreams.com used retail analytics to create a personalized offer.
B. The site used the 80-20 scheme to analyze her buying behavior.
C. The site used market basket analysis to predict her buying patterns.
D. Another retailer sold her private information to Bookdreams.com.
E. Bookdreams.com placed cookies on her computer to identify her.
Answer:
Ali supervises the conveyor belts in a distribution center. Her job is to make sure the
merchandise moves quickly from the receiving docks to the staging area in order for the
trucks to load and deliver. No merchandise is stored as the vendors already prepared it
specifically for the stores. Ali handles _____ at the distribution center.
A. ticketing
B. cross-docking
C. cataloging
D. marking
E. reverse logistics
Answer:
After selecting a target market and a retail mix, the final element in a retail strategy is
the retailer’s approach to:
A. build a sustainable competitive advantage.
B. identify all potential wholesalers.
C. identify all possible channels of communication.
D. identify possible channels of distribution.
E. manage the logistics of the product.
Answer:
Which of the following is NOT TRUE of distribution systems of the major international
markets?
A. The U.S. distribution system has the greatest retail density and the greatest
concentration of large retail firms.
B. The Indian distribution systems are characterized by small stores operated by small
firms and a large independent wholesale industry.
C. In the Chinese distribution system, the merchandise often passes through several
levels of distribution to make the daily deliveries to the small retailers efficient.
D. Northern European retailing is similar to efficient distribution systems in the U.S.
E. Indian and European economic policies are aimed at merging small independent
neighborhood retailers with large retail chains.
Answer:
The highest classification level in a buying organization is the _____.
A. order point
B. buying group
C. stock-keeping unit
D. merchandise group
E. department
Answer:
Which of the following statements best defines a warehouse club?
A. They are stores which provide a large variety and assortment of merchandise at a
convenient location with speedy checkout.
B. They are large, self-service retail food stores offering about 30,000 SKUs with high
inventory holding costs.
C. They are retailers that carry a broad variety and deep assortment, offer customer
services, and organize their stores into distinct departments for displaying merchandise.
D. They are retailers that offer a limited and irregular assortment of food and general
merchandise with little service at low prices.
E. They are large stores that combine a supermarket with a full-line discount store.
Answer:
The approach of using 50 percent markup is known as _____ because of which the
retail price would be double the cost.
A. activity costing
B. keystoning
C. budget costing
D. cost plus costing
E. regular costing
Answer:
The accounting records for Sports-R-Us, a superstore targeted at armchair athletes,
showed that it had bought and received $1,830,000 worth of merchandise. An actual
count of the merchandise in the store showed only $1,644,000 worth of merchandise in
stock. What other information is needed to calculate inventory shrinkage?
A. The store’s annual profit
B. The store’s profit margin
C. The store’s current assets
D. The store’s inventory turnover rate
E. The store’s retail sales during the period
Answer:
Lezos LLC, a chain of international restaurants, has operations in more than 50
countries around the world. The company has a practice of investing in projects long
enough for them to become successful. Which of the following is most likely a reason
for the success of Lezos in international markets?
A. A global culture
B. Adaptability
C. Human resources
D. Financial resources
E. Rigidity
Answer:
When developing the _____ for his salon, Theo decided to obtain a long-term
competitive advantage over other salons by offering longer hours, better prices, a
well-trained staff, and a perm for half-price every Wednesday to attract customers.
A. selling concept
B. business cycle
C. retail strategy
D. focal point orientation
E. marketing concept
Answer:
Which of the following is a suggested method for improving the efficiency of internal
operations?
A. Unique merchandise
B. Customer service
C. Human resource management
D. Brand image
E. Building a retail community using social media
Answer:
Periodic price audits are completed at retail stores to ensure that the:
A. prices are high enough to cover costs.
B. prices are lower than the competition.
C. extent and cause of scanning errors are identified.
D. product is priced consistent with the company’s pricing policy.
Answer:
Biometrics helps customers by:
A. facilitating a faster checkout.
B. using a global satellite tracking system.
C. enabling the use of cookies.
D. placing merchandise in appropriate locations.
E. providing the opt-in facility.
Answer:
Eunice buys a worm farm. She plans to sell a small carton of worms to people who
want to fish for $3. Her fixed costs are $1,201, and her variable cost for each carton
sold is $.75. How many cartons of worms does Eunice need to sell to reach her
break-even quantity?
A. 2712
B. 321
C. 400
D. 534
E. 888
Answer:
The _____ is the difference between the retail price and the cost of an item.
A. markup
B. markdown
C. break-even point
D. variable cost
E. fixed cost
Answer:
Who among the following should evaluate the performance of a sales associate in the
automotive department?
A. The store’s quality manager
B. The department’s sales manager
C. The department’s human resource manager
D. The department’s marketing manager
E. The department’s operations manager
Answer:
Retailers build top-of-mind awareness by _____.
A. using memorable symbols
B. keeping prices low
C. buying assortments from the leading vendors
D. connecting with family values
E. distributing coupons
Answer:
The drugstore industry has seen a decrease in their annual sales mainly due to _____.
A. higher prices on prescription drugs
B. pharmacies in full-line discount stores
C. the aging population
D. government regulations on pharmaceutical sales
E. the wide assortment of merchandise sold by them
Answer:
What is the outcome when a retailer sells counterfeit merchandise?
A. It can be heavily fined through the rulings of the Robinson-Patman Act.
B. It retailer will lose money once the customers discover the truth.
C. It can destroy the relationship with the vendor of the legitimate brand.
D. It gains a low profit margin by selling counterfeit goods.
Answer:
Why is it important for department stores to achieve a high gross margin?
A. Their operating expenses are higher than other retail formats.
B. It is stated in the store’s financial objectives.
C. Without a high gross margin, department stores will be unable to achieve a high asset
turnover.
D. The strategic profit model will otherwise change the strategy of the retailer.
E. A low gross margin will turn it into a discounter.
Answer:
The merchandise budget plan:
A. is used to keep track of the actual merchandise flows.
B. specifies the level of inventory needed to support the sales.
C. compares actual and planned sales to determine whether more merchandise is
needed.
D. identifies the performance of individual SKUs in the assortment plan.
E. uses a weighted-average score for each vendor.
Answer:
_____ means that the retailer is able to determine which customers are in the market
segment.
A. Actionable
B. Identifiable
C. Reachable
D. Substantial
E. Sustainable
Answer:
Which of the following statements best describes empowerment?
A. It is what allows the district management to focus on a few stores.
B. It is when employees abuse their positions as associates.
C. It is the authority of the upper management over important decisions.
D. It is when managers share power and decision-making authority with employees.
E. It is a type of management that focuses on hiring powerful people.
Answer:
Father Christmas is a retail store in Georgia that sells a unique Santa made from fur,
wool, and tapestry. If 150 customers wish to buy a Santa from this store, and it sells 120
before running out of stock, what is its service level?
A. 15 percent
B. 80 percent
C. 20 percent
D. 85 percent
E. 88 percent
Answer:
_____ is based on the economic principle that firms should increase communication
expenditures as long as each additional dollar spent generates more than a dollar of
additional contribution.
A. Objective-and-task analysis
B. Rule-of-thumb analysis
C. Marginal analysis
D. Affordable budgeting analysis
E. Percentage-of-sales analysis
Answer:
Randy applied for a position as a butcher’s assistant at a nearby supermarket. After he
completed his application, the manager showed him a video reviewing the
responsibilities of an assistant to the butcher. After viewing that, Randy felt sick and
told the manager he didn’t want the job. This screening technique is called _____.
A. testing
B. scaling
C. job analysis
D. job preview
E. job enrichment
Answer:
Which of the following does NOT describe an approach for buying national brand
merchandise?
A. Buyers meeting national brand vendors in wholesale market centers
B. Buyers attending trade shows to see the latest products and styles
C. Buyers using reverse auctions to procure seasonal merchandise
D. Buyers discussing the performance of the vendor’s merchandise during the previous
season
E. Vendors meeting with buyers at their offices to review and reorder last week’s best
sellers
Answer:
An appliance store has total assets of $2,800,000, accounts receivable of $900,000,
accounts payable of $700,000, inventory valued at $1,500,000, and total liabilities of
$2,500,000. In 1999, its net sales were $2,100,000, and its operating profit margin
equaled $42,000. Calculate the store’s return on assets.
A. 71.4 percent
B. 2.8 percent
C. 7.5 percent
D. 1.5 percent
E. 75 percent
Answer: