44) Linda is a fashion designer who sourced out to a manufacturer in India in order to assemble her
fall line. She assumed the patterns for the clothes were simple, and she deemed it unnecessary to
personally visit the factory and supervise the workers sewing her clothes. Months later, the
shipment arrived in New York and, the seams on all of the blouses were sewn incorrectly. This
mishap is an issue of
A) quality control.
B) tariff ramifications.
C) poor strategy.
D) global market satiation.
E) global trends.
45) Which of the following is true of collaborative supply chain management?
A) It is difficult to implement these strategies when sourcing globally.
B) These systems are based on large inventories.
C) Collaborative systems are based on child labor laws and regulations.
D) Lead times are long when using these systems.
E) Interactions between the vendor and retailer are minimal.
46) Violations of human rights are avoided by
A) only sourcing products in third-world countries.
B) only sourcing products from Asia.
C) observing core labor standards.
D) having a collaborative system.
E) having a willingness to pay more for the products.
47) Retailers proactively engage in enforcing the labor practices of their suppliers because
A) they want to maintain their reputations of providing quality merchandise.
B) they want to build strategic partnerships with developing countries.
C) they want to work toward collaborative merchandising.
D) they require smaller shipments at frequent intervals.
E) they want to ensure a safe and healthy work environment for laborers.
48) Yves, an English-speaking Frenchman, meets with buyers from the United States when they
visit Paris. Once in Paris, the buyers rely on Yves to make appointments with French vendors to
save time and penetrate the market. Yves works to help interpret and negotiate during the
buyer-vendor meetings. Therefore, Yves works for a
A) black market.
B) resident buying office.
C) reverse auction office.
D) cohort exchange office.
E) stock market.
49) Louise runs a successful shop in Chicago featuring unique dolls from Western Europe. Louise
speaks German and a little Dutch, but no Italian, French, or Spanish. Which of the following is the
best way for Louise to procure dolls from all Western European countries?
A) She can visit wholesale market centers throughout the year.
B) She can attend trade shows in the United States and meet vendors there.
C) She can establish a time for vendors to visit her in her own office.
D) She can buy from local artists of European descent.
E) She can utilize a resident buying office when she visits Europe to buy.
50) 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
51) Which of the following is not true of reverse auctions?
A) Retail buyers provide a group of potential vendors with a specification for what they want.
B) There is one buyer, the retailer, and many potential sellers, the manufacturing firms.
C) Retailers participate to get quality private-label merchandise at low prices.
D) Reverse auctions are common among commodities and seasonal products.
E) The retailer chooses the lowest bidder regardless of other factors.
52) Retailers use ________ to get quality private-label merchandise at low prices.
A) chargebacks
B) buybacks
C) reverse auctions
D) commercial bribery
E) markdown money
53) As a vendor, Melissa works well with a buyer she’s known for years at Dream Toys. This year,
Melissa’s line of toys had a few products that sold poorly, and it is now time to show the Dream
Toys’ buyer the next holiday season’s product line. Melissa knows the Dream Toys’ buyer will be a
hard negotiator. What should Melissa be prepared to do?
A) Provide markdown money.
B) Suggest pulling out of Dream Toys for a season to strategize and reinvent.
C) Suggest selling the toys for another season giving consumers time to acclimate to the products.
D) Advise that Dream Toys can sell the products at lower prices, but maintain the original prices at
other retailers.
E) Provide the Dream Toys buyer with a vacation package.
54) ________ refers to funds vendors give retailers to cover lost gross margin dollars.
A) Markdown money
B) Slotting allowance
C) Chargeback
D) Tariff
E) Buyback
55) ________ are charges imposed by a retailer to stock a new item.
A) Chargebacks
B) Slotting allowances
C) Additional markup dollars
D) Advertising allowances
E) Markdown allowances
56) Fantasy and Stanley’s are popular apparel stores. A Fantasy vendor has offered a Stanley’s
buyer an attractive discount on merchandise that had been returned to Fantasy by a different
retailer. The Stanley’s buyer realizes the high gross margin opportunity but refuses the offer
nevertheless. Why?
A) The buyer wants to preserve Stanley’s image as a fashion leader by not selling returned
merchandise that could be out of season.
B) By accepting additional merchandise, Stanley’s would be paying the additional costs of
carrying the merchandise.
C) Stanley’s would be accepting unknown merchandise and could risk the purchase as becoming
more problems than it is worth.
D) Accepting the excess merchandise could alter the terms of the purchase as well as delivery
dates.
E) Transportation costs would increase.
57) When a swimwear buyer negotiates for delivery and exclusivity with a vendor, what would a
buyer typically want?
A) A buyer would want the swimwear to arrive late in the season to avoid markdowns.
B) A buyer would ask to have merchandise at competing stores so the only competition factor is
price.
C) A buyer would want unique swimwear to arrive early in the season to get the most sales at the
original price.
D) A buyer would ask for last season’s swimwear as well as the latest swimwear to be able to offer
a price differentiation.
E) A buyer would ask for parallel merchandise to be able to offer more variety in assortments.
58) Which of the following is a negotiation issue that is often used in fashion merchandise
categories?
A) Slotting allowances
B) Additional markup dollars
C) Advertising allowances
D) Exclusivity arrangement
E) Co-op (cooperative) advertising
59) When negotiating with a vendor, the best outcome for a retailer would be to
A) dismiss the negotiation if there’s no agreement and ultimately cancel the vendor relationship.
B) leave the negotiations with an advantage over the vendor.
C) have mutual gain.
D) give the vendor the advantage in the negotiation only to use it in the retailer’s favor for the
following season.
E) agree to disagree on performance thresholds.
60) Isabel works as a senior jewelry buyer for a department store chain. On a recent visit to a trade
show, she noticed a new vendor selling unique earrings, necklaces, and bracelets made of glass.
She had seen such pieces in trade magazines, but initially ignored them because of the exorbitant
price. She thought her affluent customers would appreciate the look, so she decided to talk with the
sales representative to learn more about the possibility of a trial in only a few of her top stores.
Isabel is in the ________ phase of building strategic relationships.
A) expansion
B) consideration
C) commitment
D) exploration
E) awareness
61) Randolph is the divisional merchandise manager for home products for Daisy’s, a supermarket.
At a recent trade show, he noticed small kitchen appliances being shown in retro colors like
pistachio, eggplant, and cotton candy. Knowing the kitchen designs were moving in this direction,
he decided to discuss it with his senior buyers to see if these retro colors would suit the Daisy’s
market. Randolph is in the ________ phase of building strategic relationships.
A) awareness
B) consideration
C) exploration
D) expansion
E) commitment
62) What is the best reason for retailers to develop and maintain relationships with multiple and
sometimes competing suppliers?
A) A more efficient supply chain occurs when multiple vendors are involved.
B) A function of retailers is to provide assortments, so they must deal with a variety of suppliers.
C) By working with multiple suppliers, retailers tend to make better negotiators.
D) A variety of vendors assures more profit.
E) It would be unethical for a buyer to solely work with one supplier.
63) When Whitney took over her father’s sporting goods store, she evaluated some of her father’s
vendor relationships. She found that Rodney’s Exercise Wear wasn’t particularly profitable for the
store. Although committed, his products were expensive, and he seemed inflexible. Whitney tried
to work out a more amicable relationship with him by discussing her sales goals and new ideas for
the coming year, but Rodney seemed uninterested. Which of the following elements crucial for
maintaining strategic relationships is absent in the given example?
A) Long-term gains
B) Poor leadership
C) Fulfilled obligations
D) Open communication
E) Credible commitments
64) By sharing common goals, buyers and vendors
A) can avoid sharing each firm’s most strategic information.
B) can pool their strengths and abilities to exploit potential opportunities.
C) can conclude that the long-term results of the relationship are insignificant.
D) do not have to coordinate systems for the partnership to succeed.
E) commonly miscalculate the cost of merchandise.
65) 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) The retailer will lose money once the customers discover the truth.
C) It can destroy the relationship with the vendor of the legitimate brand.
D) The retailer gains a low profit margin by selling counterfeit goods.
E) It is known as the gray market.