Question 1

A slotting allowance is a form of _____.
A)channel conflict
B)short-run strategy by a manufacturer
C)channel cooperation
D)electronic data interchange

Accepted Answer

The answer of A slotting allowance is a form of...

Question 2

Which one of the following activities by suppliers is not associated with a floor-ready merchandise strategy?
A)requiring large minimum order sizes
B)placing of special tags on merchandise
C)placing merchandise on hangers
D)pre-ticketing of merchandise

Accepted Answer

Requiring large minimum order sizes is not associated with a floor-ready merchandise strategy, as it may not allow for the flexibility needed to quickly replenish and adjust inventory levels to meet customer demand. The other options (placing special tags, placing merchandise on hangers, pre-ticketing merchandise) are all activities commonly associated with a floor-ready merchandise strategy.

Question 3

Prior to establishing a quick response (QR)inventory planning system,suppliers need to rethink their _____.
A)credit terms and quantity discount schedule
B)quantity discount schedule and minimum order sizes
C)purchase prices and minimum order sizes
D)credit terms and minimum order sizes

Accepted Answer

The QR inventory planning system relies on quick delivery of smaller, more frequent orders. Therefore, suppliers need to reconsider their quantity discount schedule and minimum order sizes to ensure they can meet the demands of this system. Credit terms and purchase prices may also need to be adjusted to accommodate more frequent, smaller orders, but they are not as directly related to the success of the QR inventory planning system.

Question 4

Which of the following does not enable a retailer to reduce its inventory levels?
A)direct store delivery
B)memorandum purchases
C)floor-ready merchandise
D)quick response inventory planning

Accepted Answer

Memorandum purchases are when a retailer places an order with a manufacturer, but the manufacturer retains ownership of the inventory until it is sold to the end customer. This does not enable the retailer to reduce their inventory levels since they do not own the inventory until it is sold. The other options (direct store delivery, floor-ready merchandise, quick response inventory planning) all enable a retailer to reduce their inventory levels by streamlining the supply chain and reducing the amount of time inventory spends in transit or in storage.

Question 5

A retailer reduces its invoice by 5 percent since a supplier shipped seasonal merchandise 10 days late.The price reduction is designed to compensate the retailer for additional markdowns.This reduction illustrates a _____.
A)markdown adjustment
B)slotting allowance
C)slotting fee
D)chargeback

Accepted Answer

A chargeback is a deduction from the invoice amount due to issues such as late shipment, which is what the retailer is doing by reducing the invoice by 5 percent.

Question 6

Both consignment purchases and memorandum purchases enable a retailer to _____.
A)increase information flows
B)lower insurance costs
C)improve cash flow
D)reduce inventory levels

Accepted Answer

Consignment purchases allow retailers to receive merchandise without paying for it upfront, which can help improve their cash flow. Memorandum purchases, also known as memo purchases, allow retailers to borrow merchandise from wholesalers or manufacturers to display and sell in their stores. This helps retailers reduce their inventory levels without having to purchase the merchandise upfront, further improving cash flow. Both of these purchasing methods can improve a retailer's cash flow.

Question 7

Description buying by a retailer is most appropriate for _____.
A)jewelry
B)art
C)antiques
D)branded goods

Accepted Answer

Retailers typically purchase branded goods from manufacturers or wholesalers to sell in their stores. Jewelry, art, and antiques, on the other hand, may be more suited for niche markets or specialized retailers.

Question 8

Description buying is most frequently used for _____.
A)expensive,one-time purchases
B)standardized,unbreakable merchandise
C)expensive,perishable merchandise
D)items purchased under new or special orders

Accepted Answer

The answer of Description buying is most frequently used for...

Question 9

Which inventory management system results in longer-term retailer-vendor relationships and frequent reordering?
A)computer-based UPC scanning
B)automatic recording
C)quick response inventory planning
D)economic order quantity

Accepted Answer

Quick response inventory planning allows for real-time communication between the retailer and vendor, leading to better coordination and faster restocking times. This results in a smoother supply chain and longer-term relationships between the two parties, as well as frequent reordering. Computer-based UPC scanning and automatic recording are helpful tools for inventory management, but do not necessarily lead to longer-term relationships or frequent reordering. Economic order quantity is a mathematical formula used for determining optimal inventory levels and reorder points, but does not directly impact retailer-vendor relationships.

Question 10

Third-party logistics is another term for _____.
A)outsourcing logistics
B)quick response inventory management
C)supply chain management
D)floor-ready merchandise

Accepted Answer

Third-party logistics (3PL) refers to outsourcing logistics functions to an external company that specializes in logistics operations. This can include warehousing, transportation, inventory management, and other supply chain services.

Question 11

An unsatisfactory evaluation may cause a retailer to reject an entire shipment.The retailer is using which form of merchandise evaluation?
A)sampling
B)description
C)inspection
D)statistical evaluation

Accepted Answer

The answer of An unsatisfactory evaluation may cause a retailer...

Question 12

A paperless,computer-to-computer relationship between retailers and their vendors is _____.
A)electronic data interchange
B)quick response inventory planning
C)floor-ready merchandise
D)a basic automatic replenishment system

Accepted Answer

Electronic data interchange (EDI) is a system used by retailers and vendors to exchange business documents in a paperless, computer-to-computer format. It allows for efficient communication and helps to streamline supply chain processes. Quick response inventory planning, floor-ready merchandise, and basic automatic replenishment systems do not necessarily involve electronic communication between retailers and vendors.

Question 13

The purchase of out-of-season goods,manufacturer overruns,or cancelled orders by a closeout retailer illustrates _____.
A)inspection buying
B)channel power
C)opportunistic buying
D)scrambled merchandising

Accepted Answer

The purchase of out-of-season goods, manufacturer overruns, or cancelled orders implies that the retailer is taking advantage of a buying opportunity that is not part of their normal procurement practices. This is known as opportunistic buying.

Question 14

A quick response (QR)inventory management system seeks to _____.
A)decrease inventory ordering costs
B)decrease delivery lead time from vendors
C)increase the quantity discounts available to a retailer
D)decrease inventory holding costs

Accepted Answer

A quick response (QR) inventory management system is designed to decrease inventory holding costs by allowing for quick and efficient inventory replenishment based on real-time sales data. It helps to minimize excess inventory and reduce the costs associated with storing and maintaining inventory.

Question 15

Which inventory management system in retailing corresponds to a just-in-time inventory management system?
A)automatic reordering
B)computer-based UPC scanning
C)economic order quantity
D)quick response inventory planning

Accepted Answer

Quick response inventory planning is the closest fit to a just-in-time inventory management system in retailing. Just-in-time inventory management focuses on minimizing inventory levels and maximizing the efficiency of inventory movement. Quick response inventory planning is a similar concept that relies on analyzing sales data to quickly react to changing customer demand and adjust inventory levels accordingly. The other options (automatic reordering, computer-based UPC scanning, and economic order quantity) do not specifically align with the principles of just-in-time inventory management.

Question 16

In order for quick response (QR)inventory planning to be effective,_____.
A)inventory ordering costs need to be low
B)inventory holding costs need to be low
C)electronic data interchange must not be functioning
D)shipping costs must be reduced

Accepted Answer

The answer of In order for quick response (QR)inventory planning...

Question 17

Which full-service merchant wholesaler carries a very deep assortment?
A)general merchandise
B)specialty merchandise
C)drop shipper
D)cash-and-carry

Accepted Answer

Specialty merchandise wholesalers tend to carry a very deep assortment within their specific niche or industry. For example, a specialty food wholesaler may carry a large variety of unique and gourmet food products.

Question 18

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

Accepted Answer

Having a large inventory actually increases the risk of obsolescence and deterioration, as items may become outdated or spoil before they are sold, contrary to the advantages offered by bulk purchasing, reduced stockouts, and lower shipping costs per item.

Question 19

Excessive use of chargebacks by a retailer illustrates _____.
A)scrambled merchandising
B)channel power
C)the retail life cycle
D)channel cooperation

Accepted Answer

Excessive use of chargebacks demonstrates the power a retailer has over its suppliers in the channel. The retailer can use the threat of chargebacks to force compliance with their policies and requirements, which can be costly for suppliers. This imbalance in power is an illustration of channel power.

Question 20

The major difference between a consignment purchase and a memorandum purchase is based on _____.
A)when title passes from seller to buyer
B)when an item is paid for
C)purchase price
D)eligibility for cooperative advertising allowances

Accepted Answer

The major difference between a consignment purchase and a memorandum purchase is that in a consignment purchase, title passes from the seller to the buyer only after the item is sold, whereas in a memorandum purchase, title passes from the seller to the buyer immediately upon purchase.

Quiz 15: Implementing Merchandise

A slotting allowance is a form of _____.

Which one of the following activities by suppliers is not associated with a floor-ready merchandise strategy?

Prior to establishing a quick response (QR) inventory planning system,suppliers need to rethink their _____.

Which of the following does not enable a retailer to reduce its inventory levels?

A retailer reduces its invoice by 5 percent since a supplier shipped seasonal merchandise 10 days late.The price reduction is designed to compensate the retailer for additional markdowns.This reduction illustrates a _____.

Both consignment purchases and memorandum purchases enable a retailer to _____.

Description buying by a retailer is most appropriate for _____.

Description buying is most frequently used for _____.

Which inventory management system results in longer-term retailer-vendor relationships and frequent reordering?

Third-party logistics is another term for _____.

An unsatisfactory evaluation may cause a retailer to reject an entire shipment.The retailer is using which form of merchandise evaluation?

A paperless,computer-to-computer relationship between retailers and their vendors is _____.

The purchase of out-of-season goods,manufacturer overruns,or cancelled orders by a closeout retailer illustrates _____.

A quick response (QR) inventory management system seeks to _____.

Which inventory management system in retailing corresponds to a just-in-time inventory management system?

In order for quick response (QR) inventory planning to be effective,_____.

Which full-service merchant wholesaler carries a very deep assortment?

Which of the following is not a major advantage of having a large inventory for a retailer?

Excessive use of chargebacks by a retailer illustrates _____.

The major difference between a consignment purchase and a memorandum purchase is based on _____.