Retailing Management, 10e (Levy)
Chapter 9 Information Systems and Supply Chain Management
1) Electronic data interchange (EDI) is a set of activities and techniques firms employ to efficiently
and effectively manage the flow of merchandise from the vendors to the retailer’s customers.
2) An advance shipping notice (ASN) is a document that tells the DC what specifically is being
shipped and when it will be delivered.
3) Cross-docking is when vendors ship merchandise prepackaged in the quantity required for each
store; when the products arrive to the distribution center, the products move to the staging area to
be shipped to the designated stores.
4) The pick ticket is a document or display on a screen in a forklift truck that indicates how many
cartons to get from specific storage areas.
5) In a pull supply chain, there is less likelihood of being overstocked or out of stock because the
store requests for merchandise are based on customer demand.
6) Drop shipping is the process of capturing value from and/or properly disposing of merchandise
returned by customers and/or stores.
7) Overall, effective supply chain management results in higher gross margins and lower turnover
of inventory.
8) Vendor-managed inventory (VMI) is an approach for improving supply chain efficiency in
which the vendor is responsible for maintaining the retailer’s inventory levels.
9) Radio frequency identification (RFID) is a technology that allows an object or person to be
identified at a distance by means of radio waves.
10) Floor-ready merchandise is merchandise that is ready to be placed on the selling floor.
11) ________ is a set of activities and techniques firms employ to efficiently and effectively
manage the flow of merchandise from the vendors to the retailer’s customers.
A) Enterprise feedback management
B) Supply chain management
C) Total quality management
D) Customer relationship management
E) Employee experience management
12) Which of the following is a benefit of efficient supply chain management?
A) Decrease in inventory turnover
B) Increase in product availability
C) Increase in turnaround time
D) Increase in organizational turnover
E) Decrease in cross selling
13) Which of the following is not a benefit of efficient supply chain management?
A) Increase in product availability
B) Decrease in inventory turnover
C) More tailored assortments
D) High return on investments
E) Sustainable competitive advantage
14) Which of the following is not a reason why an efficient supply chain is important to retailers?
A) Improved product availability
B) Higher return on investment
C) Strategic advantage
D) Trendier merchandise
E) Improved in-stock position
15) Fewer stockouts and tailored assortments translate into
A) lower sales.
B) higher costs.
C) higher inventory turnover.
D) higher prices for retailers.
E) lower employee productivity.
16) A(n) ________ occurs when an SKU that a customer wants is not available.
A) overstock
B) B-stock
C) obsolescence
D) excess supply
E) stockout
17) Jane visits the local supermarket to purchase caviar for a dinner party. Upon enquiry, she finds
out that caviar is sold out. Which of the following terms best describes this situation?
A) Stockout
B) Excess supply
C) Overstock
D) B-stock
E) Obsolescence
18) Which of the following is a typical reaction that customers exhibit when experiencing multiple
stockouts?
A) Switching to another retailer
B) Patronizing the retailer
C) Promoting the retailer on social media
D) Initiating litigation against the retailer
E) Reviewing product attributes
19) Bloomsberry LLC, a fashion retailer, periodically updates their collection of apparel. Woolen
apparel is stocked during winter, and cotton apparel is stocked during summer. Which of the
following is this an example of?
A) Stockout
B) B-stock
C) Unique merchandise
D) Tailored assortments
E) Clearance sale
20) An efficient supply chain and information system can improve a retailer’s return on assets
(ROA) because the system
A) increases sales and net profit margins, without increasing inventory.
B) increases sales and net profit margins by increasing inventory.
C) reduces sales, but increases net profit margins by increasing inventory.
D) reduces net profit margins, but increases sales by increasing inventory.
E) reduces net profit margins by festering sales, without increasing inventory.
21) In an efficient supply chain and information system, net sales increase because
A) customers are offered heavy discounts on the products.
B) customers are offered tailored assortments that are in stock.
C) retailers get tax benefits for setting up the system.
D) retailers are offered heavy discounts by their suppliers.
E) retailers prohibit customers from window shopping.
22) Which of the following statements is a method for improving net profit margin?
A) It can be improved by decreasing the gross margin and lowering sales.
B) It can be improved by decreasing the gross margin and increasing expenses.
C) It can be improved by decreasing the net margin and lowering expenses.
D) It can be improved by increasing the gross margin and lowering expenses.
E) It can be improved by increasing the net margin and lowering sales.
23) When inventory levels, inventory investment, and total assets are low,
A) asset and inventory turnovers are low.
B) asset turnover is high but inventory turnover is low.
C) asset and inventory turnovers are high.
D) asset turnover is low but inventory turnover is high.
E) asset and inventory turnover cannot be predicted.
24) A(n) ________ is a document that tells the DC what specifically is being shipped and when it
will be delivered.
A) Universal product code (UPC)
B) Radio frequency identification (RFID)
C) Advanced shipping notice (ASN)
D) Shipping document
E) Bill of lading (BOL)
25) Purchase data collected at the point of sale goes into a huge database known as a
A) spreadsheet.
B) computerized processing unit.
C) electronic data interchange.
D) database chain.
E) data warehouse.
26) When a regular customer calls a well-known pizza delivery restaurant, the order-taker types in
the caller’s name. The computer screen shows the customer’s address, phone number, directions to
his or her house, his or her usual order, and the date and frequency of orders. If the customer has
not ordered during a two-month period, or the average number of orders has been down, then the
pizza parlor mails them a coupon of their favorite pizza. Which of the following does the pizza
parlor use?
A) Data warehouse
B) Data scrapping
C) Web scrapping
D) Direct marketing
E) Direct account management
27) ________ is the computer-to-computer exchange of business documents from the retailer to
the vendor, and vendor to retailer.
A) Automated replenishment system
B) Universal Product Code (UPC) system
C) Electronic data interchange (EDI) system
D) Point of sale (POS)
E) Collaborative planning, forecasting, and replenishment (CPFR)
28) How do retailers and vendors ensure that the information that passes back and forth between
them is secure?
A) Paper hard copies are sent back and forth for comparison to be certain that the information is
accurate.
B) Suppliers, customers, and new clients all have a form of access to information.
C) With a high level of planning, implementation, and control of the flow of information, the
information will be secure.
D) There is an element of trust that is necessary in doing business with one another.
E) The system ensures that the information received has not been tampered with by ensuring that
the communication is both authentic and authorized.
29) ________ technology is a wireless network and a mobile device that receives demand
notification and enables a speedy response. This solution allows the associate closest to the
ordered item to physically pull it and verify its availability.
A) Mobile task management
B) EDI
C) CPFR
D) VMI
E) Data warehouse
30) Which of the following statements is not a benefit of EDI to retailers and their vendors?
A) EDI reduces cycle time.
B) Information flows quicker, so inventory turnover is higher.
C) It improves overall quality of communications.
D) It is a computer readable format that can be easily analyzed.
E) EDI increases the desirability of the product for the end consumer.
31) Which of the following statements is true of a dispatcher’s role?
A) Dispatchers are responsible for packaging and quality control.
B) Dispatchers allocate warehouse space to merchants.
C) Dispatchers create pick tickets.
D) Dispatchers make pricing and identification labels and place them on merchandise.
E) Dispatchers coordinate deliveries to the distribution centers.
32) Sara, who works at WorldFly LLC, is responsible for coordinating deliveries to the
distribution center. Which of the following terms best describes Sara’s role?
A) Dispatching
B) Receiving
C) Checking
D) Ticketing
E) Marking
33) Which of the following is not a function of a distribution center?
A) Managing inbound transportation
B) Storing and cross-docking
C) Receiving and checking
D) Getting merchandise floor-ready
E) Negotiating with vendors
34) Which of the following is a function of a distribution center?
A) Negotiating with vendors
B) Providing technical support for products
C) Providing after-sale service
D) Managing inbound transportation
E) Managing customer support
35) The process where vendors ship the merchandise prepackaged to the distribution center in the
quantities required for each store and then that merchandise is shipped to stores as soon as it is
received is called
A) ticketing.
B) cross-docking.
C) push supply.
D) pull supply
E) reverse logistics.
36) 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
37) Which of the following statements about receiving, checking, marking, and ticketing is true?
A) Only receiving and checking involve UPC labels.
B) It is more efficient and less costly to ticket merchandise at the store level.
C) It is more efficient for a retailer to perform ticketing and marking at a DC than in its stores.
D) To perform the checking process correctly, every carton must be opened and its merchandise
examined.
E) The checking process is performed after the merchandise has been ticketed and marked.
38) The retailer’s order is transmitted to the distribution system via computers. Then, the computer
at the distribution center creates a ________, a document or display on a screen in the forklift truck
that indicates how many cartons to get from specific storage areas.
A) selection order
B) pick ticket
C) requisition order
D) sorting order
E) selection list
39) Retailers can use ________ to arrange for the storage and shipping of their merchandise.
A) dispatchers
B) freight forwarders
C) integrated third-party logistics companies
D) reverse logistic companies
E) public warehouses
40) Each time a customer makes a purchase at a Walmart store from the health and beauty area,
data is transmitted to the nearest distribution center so the merchandise can be replenished and sent
on the next truck delivery. Which of the following strategies does Walmart utilize?
A) Cross check logistic strategy
B) Pull supply chain
C) Cost-efficient logistic strategy
D) Push supply chain
E) Influential logistic strategy
41) A retailer whose orders are generated at the store level on the basis of sales data captured by
point-of-sale terminals is said to employ a(n):
A) cost efficient logistic strategy.
B) pull supply chain.
C) influential logistic strategy.
D) cross check logistic strategy.
E) push supply chain.
42) Which of the following statements does not describe the benefits of a pull strategy?
A) There exists less likelihood of being overstocked or out of stock because the store orders
merchandise as needed on the basis of consumer demand.
B) It increases inventory turnover.
C) It is more responsive to changes in customer demand.
D) It becomes more efficient than a push approach when demand is uncertain and difficult to
forecast.
E) All of these statements are benefits of a pull strategy.
43) In a(n) ________, merchandise is allocated to stores on the basis of forecasted demand.
A) push supply chain
B) cross check logistic strategy
C) influential logistic strategy
D) pull supply chain
E) cost-efficient logistic strategy