Question 1

Why are vendors in a better position to manage a category than a smaller retailer?

Accepted Answer

Vendors are often in a better position to manage a category than are retailers because they have superior information about a category.The vendor's entire focus is on a specific category,while buyers are typically responsible for several categories.

Question 2

When there is a high inventory turnover,there is an increase in sales because:

Accepted Answer

Higher inventory turnover increases sales because new merchandise is continually available to customers.New merchandise attracts customers to visit the store more frequently because they know they will be seeing different merchandise each time they visit the store.

Question 3

Smart Wash is a popular brand of detergent powder.The stock needs to be continuously replenished in stores and supermarkets due to its high demand.The detergent powder belongs to the category of _____.

Accepted Answer

Because the demand for staple merchandise is very predictable,merchandise planning systems for staple categories often involve continuous replenishment.

Question 4

A performance measure which assesses a buyer's contribution to ROA is called the _____.

Accepted Answer

A financial ratio that assesses a buyer's contribution to ROA is gross margin return on inventory investment (GMROI).It measures how many gross margin dollars are earned on every dollar of inventory investment made by the buyer.

Question 5

Which of the following is NOT a benefit of a high inventory turnover?

Accepted Answer

Increasing inventory turnover can have positive impacts on sales by attracting more customer visits,improving sales associate morale,and providing more resources to take advantage of new buying opportunities.

Question 6

Which of the following statements is NOT true of a potential problem with appointing vendors as category captains?

Accepted Answer

Selecting vendors as category captains has several advantages for retailers.It makes merchandise management tasks easier and can increase profits.

Question 7

Which of the following statements holds true for the purchase of staple merchandise?

Accepted Answer

Because the demand for staple merchandise is very predictable,merchandise planning systems for staple categories often involve continuous replenishment.

Question 8

Which of the following is NOT true of staple merchandise categories?

Accepted Answer

Because the demand for staple merchandise is very predictable,merchandise planning systems for staple categories often involve the use of continuous replenishment systems.

Question 9

Which of the following is NOT true of a fashion merchandise category?

Accepted Answer

Forecasting the sales for fashion merchandising categories is challenging because there is less flexibility in correcting forecasting errors and less history to base forecasts upon.

Question 10

Which of the following is an example of staple merchandise?

Accepted Answer

Staple merchandise categories are in continuous demand over an extended time period.

Question 11

What is the drawback of utilizing category captains?

Accepted Answer

A potential problem with establishing a vendor as a category captain is that the vendor could take advantage of its position.

Question 12

Merchandise like men's crew socks,canned peas,college ruled loose leaf paper,and 60-watt light bulbs would be considered _____ that are in continuous demand over an extended time period.

Accepted Answer

Staple merchandise categories are categories that are in continuous demand over an extended time period.

Question 13

Which of the following products is NOT an example of a stock-keeping unit (SKU)?

Accepted Answer

An SKU is the smallest unit available for keeping inventory control.For example,a pair of size 5,stonewashed,blue,straight-legged Levi jeans is an SKU.

Question 14

Which of the following is NOT true of category management?

Accepted Answer

A category captain is the vendor who works with the retailer to develop a better understanding of customer behavior,create assortments that satisfy consumer needs,and improve the profitability of the merchandise category.

Question 15

A _____ is the basic unit of analysis for making merchandise management decisions.

Accepted Answer

The merchandise category is the basic unit of analysis for making merchandising management decisions.

Question 16

Which of the following is a consequence of a high inventory turnover?

Accepted Answer

Increasing inventory turnover can have positive impacts on sales by attracting more customer visits,improving sales associate morale,and providing more resources to take advantage of new buying opportunities.

Question 17

Which of the following persons is a vendor who forms an alliance with a retailer to help gain consumer insight,satisfy customer needs,and improve performance and profit across a category?

Accepted Answer

A category captain is the vendor who works with the retailer to develop a better understanding of customer behavior,create assortments that satisfy consumer needs,and improve the profitability of the merchandise category.

Question 18

_____ categories consist of items whose sales fluctuate dramatically depending on the time of year.

Accepted Answer

Seasonal merchandise categories consist of items whose sales fluctuate dramatically depending on the time of the year.

Question 19

_____ consist of items that are only in demand for a relatively short period of time.

Accepted Answer

Fashion merchandise categories are in demand only for a relatively short period of time.

Question 20

A(n)_____ is the smallest unit available for inventory control.

Accepted Answer

A stock-keeping unit (SKU)is the smallest unit available for inventory control.

Quiz 12: Managing the Merchandise Planning Process