Question 1

A new fashion costing $15,000 in Paris is copied in a $1,000 version in emulation,and in a $75 version in economic emulation.

Accepted Answer

The statement accurately describes the pricing of the fashion item being copied in different versions.

Question 2

The battle of the brands relates to a battle for shelf space and promotional emphasis between manufacturer and private brands.

Accepted Answer

The battle of the brands refers to the competition between manufacturer and private brands for shelf space and promotion within a retail store.

Question 3

The store type with the greatest depth of assortment is a specialty store.

Accepted Answer

A specialty store typically focuses on a specific category or product type, and therefore carries a deep assortment within that category. For example, a specialty shoe store may have a wide variety of styles, sizes, and colors within their selection of shoes.

Question 4

The effectiveness of a micromerchandising strategy can best be judged through category management.

Accepted Answer

Category management involves analyzing and optimizing the performance of a specific product category or group of products. By implementing a micromerchandising strategy, which involves tailoring product placement and presentation to specific consumer segments, category managers can assess the impact of this strategy on sales and overall category performance. Therefore, category management is an effective way to evaluate the effectiveness of a micromerchandising strategy.

Question 5

A retailer with homogeneous demand patterns throughout its branches should use a decentralized buying organization.

Accepted Answer

A retailer with homogeneous demand patterns throughout its branches would benefit more from a centralized buying organization to leverage economies of scale and maintain consistency in product offerings.

Question 6

Orders for staples are generally made using negotiated contracts.

Accepted Answer

The answer of Orders for staples are generally made using...

Question 7

Stressing the sales of private brands at the expense of manufacturer brands by retailers is an example of channel power.

Accepted Answer

The answer of Stressing the sales of private brands at...

Question 8

Outside buying organizations are typically used by large retail chains.

Accepted Answer

The answer of Outside buying organizations are typically used by...

Question 9

Much of the benefit of resident buying offices can be achieved by a retailer using an outside buying organization.

Accepted Answer

An outside buying organization can provide retailers with the benefits of buying offices such as sourcing and negotiating deals with suppliers, without having to establish and maintain their own physical presence in the sourcing location. Therefore, much of the benefit of resident buying offices can be achieved through outsourcing to a credible buying organization.

Question 10

The battle of the brands is an example of channel conflict.

Accepted Answer

The battle of the brands refers to the competition between different brands within the same channel or marketplace, which creates channel conflict. Therefore, the statement is true.

Question 11

If it takes a retailer three days to process an order and the supplier an additional five days to deliver the merchandise,the retailer should begin to order the merchandise at least 15 days before the old inventory runs out.

Accepted Answer

The total time needed is 3 days for processing plus 5 days for delivery, totaling 8 days, not 15.

Question 12

A basic stock list changes less on a year-to-year basis than either a never-out list or a model stock plan.

Accepted Answer

A basic stock list typically includes essential products that are consistently in demand and therefore do not change as frequently as the items on a never-out list (which includes items that are always needed) or a model stock plan (which is a custom-designed inventory management strategy).

Question 13

The traditional product life cycle curve is bell-shaped.

Accepted Answer

The traditional product life cycle curve is commonly represented as a bell-shaped curve, with four stages: introduction, growth, maturity and decline.

Question 14

A narrow and shallow retail assortment strategy requires the lowest inventory investment.

Accepted Answer

A narrow and shallow retail assortment strategy focuses on carrying a limited range of products in small quantities, which leads to lower inventory investment. This strategy helps retailers reduce costs while still meeting the specific needs of their target market.

Question 15

Direct product profitability corresponds to a product's gross profit.

Accepted Answer

Direct product profitability (DPP) measures the specific profit associated with a product, taking into account not just the gross profit but also the direct costs involved in selling that product, such as handling, shelf space, and distribution. Gross profit, on the other hand, is calculated simply as sales revenue minus the cost of goods sold (COGS) and does not account for these additional direct costs.

Question 16

Through category management,an item's performance is ranked only on the basis of gross profit as a percent of sales.

Accepted Answer

Category management takes into consideration various factors such as sales volume, market trends, consumer preferences, and competitive landscape along with gross profit percent to rank items for performance.

Question 17

Decentralized buying organizations generally secure the best merchandise fit with each specific geographic area where a retailer has stores.

Accepted Answer

Decentralized buying organizations allow for purchasing decisions to be made at the local level, which can result in better merchandise selection for each individual store's specific customer base and geographic location.

Question 18

The computation of direct product profitability includes an item's share of allocated overhead costs.

Accepted Answer

The answer of The computation of direct product profitability includes...

Question 19

In the vertical trend theory,fashion innovators are opinion leaders within any social class; in the horizontal trend theory,fashion innovators are the upper social classes.

Accepted Answer

In the vertical trend theory, fashion innovators are the upper social classes, suggesting that fashion trends start at the top of the social hierarchy and move downward. In contrast, the horizontal trend theory posits that fashion innovators can be found within any social class, indicating that trends spread across social strata rather than moving vertically.

Question 20

Micromerchandising is generally associated with centralized buying organizations.

Accepted Answer

Micromerchandising refers to tailoring product assortments and marketing strategies to local tastes and preferences, which is typically more associated with decentralized buying, allowing individual stores or regions to have more control over their inventory.

Quiz 14: Developing Merchandise Plans