Which of the following is not a major advantage of having a large inventory for a
retailer?
a. quantity discounts in purchases
b. lower risk of obsolescence and deterioration
c. lower frequency of stockouts
d. low per-item shipping costs
The relationship among net profit margin, asset turnover, and financial leverage is
known as _____.
a. zero-based budgeting
b. the strategic profit model
c. opportunity costs
d. gross profit
A customer orders products by mail, phone, or fax in _____.
a. services retailing
b. direct marketing
c. direct selling
d. retail catalog showrooms
A magazine with a circulation of 2,500,000 has a per-page advertising rate of $30,000.
Sixty percent of the magazine’s readers are target customers for the retailer. The
retailer’s real cost per thousand for this magazine is _____.
a. $12
b. $20
c. $114
d. $192
The least attention is given to chains’ branches in which retail organizational form?
a. franchise organization
b. main store control organization
c. separate store organization
d. equal store organization
A collection period equals _____.
a. [(accounts receivable)/(net sales)] x 365
b. (accounts receivable)/(net sales)
c. [(current assets)/net sales)] x 365
d. [(cash) + (accounts receivable)/(net sales)] x 365
Which type of sales presentation is most appropriate when consumer needs are similar
and when sales turnover is high?
a. canned sales presentation
b. need-satisfaction approach
c. point-of-purchase promotion
d. vertical cooperative advertising agreement
A disadvantage of centralized purchasing to a chain retailer is _____.
a. overdependence on the boss
b. lack of quantity discounts
c. absence of bargaining power
d. the difficulty in adapting to local needs
Average sales per store, sales per square foot of selling space, and inventory turnover
are examples of retail _____.
a. return on net worth performance ratios
b. non-key business ratios
c. inventory management ratios
d. performance measures
Double taxation characterizes which retail ownership form?
a. sole proprietorship
b. government stores
c. partnership
d. corporation
Inventory on hand, purchases, sales volume, and shortages are recorded through
observation in a _____ system.
a. visual inspection
b. stock-counting
c. perpetual inventory
d. point-of-sale
Which form of distribution balances channel cooperation with an increased opportunity
for product sales?
a. exclusive distribution
b. selective distribution
c. intensive distribution
d. dual distribution
Local advertising is ineffective in reaching _____.
a. baby boomers
b. Generation X consumers
c. outshoppers
d. bachelors
A major problem associated with increasing the number of store entrances is the _____.
a. creation of dead areas
b. closeness to parking facilities
c. vehicular traffic control
d. pilferage control for employees, customers, and vendors
Which of the following illustrates a retail transaction?
a. an auto manufacturer purchasing brochures to be distributed by its dealers
b. a supermarket purchasing a freezer case for meat
c. the U.S. government purchasing military aircraft
d. a consumer buying coffee in a vending machine
The Robinson-Patman Act was developed to _____.
a. reduce the power of dealer branding
b. help provide honest advertising
c. curb the potential bargaining power of large retail chains
d. limit price competition among retailers
At which price does the retailer maximize total sales revenue?
a. $5.00
b. $6.00
c. $7.00
d. $8.00
A retailer will have low asset turnover when it has _____.
a. high debt
b. a high profit margin
c. inappropriate inventory
d. high financial leverage
A firm cannot improve employee productivity through self-service merchandising.
In the wheel of retailing, a retailer becomes vulnerable when it places too much reliance
on its price (versus its image).
In comparison to traditional store-based retailing, startup costs in direct marketing are
comparatively low.
Survey and observation techniques are considered experiments if they take place under
controlled conditions.
A local retailer seeking to expand on a regional basis and that does not have adequate
financing, should consider a chain organization instead of franchising.
A good retail audit is conducted on a regular basis, comprehensive, systematic, and
conducted in an independent manner.
Cognitive dissonance can occur both before and after a purchase.
The basic stock method plans inventory requirements on the basis of the weeks’ supply
method.
Retail image perceptions are partially based on a retailer’s functional qualities and
partially by a consumer’s psychological attributes.
In a vertical fashion trend, fashion innovators are the upper social classes; in a
horizontal fashion trend, fashion innovators are opinion leaders within any social class.