CH15 Implementing Merchandise Plans

Question 1

want book (want slip) system (p. 363)

Answer 1

a formal way to record consumer requests for unstocked or out-of-stock merch

Question 2

chargebacks (p. 365)

Answer 2

when retailers (at their own discretion) make deductions in their bills for infractions (i.e., late shipments, damaged/expired goods, etc.)

Question 3

opportunistic buying (p. 368)

Answer 3

when low prices are negotiated from merch whose sales have not lived up to expectations, end-of-season goods, items consumers have returned to the manufacturer or another retailer, and closeouts

Question 4

slotting allowances (p. 368)

Answer 4

payments that retailers require of vendors for providing shelf space; can vary depending on each vendor

Question 5

consignment purchase (p. 369)

Answer 5

an arrangement where a retailer sells products without taking ownership or any financial risk, as the supplier retains title to the goods until they are sold

Question 6

memorandum purchase (p. 369)

Answer 6

whereby the retailer takes on delivery and is responsible for damages; risk is still low in this arrangement

Question 7

RFID (radio frequency identification) system (p. 369)

Answer 7

a method of storing and remotely retrieving data using devices called RFID tags or transponders

Question 8

logistics (p. 372)

Answer 8

the total process of planning, implementing and coordinating the physical movement of merch from manufacturer (wholesaler) to retailer to customer in the most timely, effective and cost-efficient manner possible

Question 9

supply chain (p. 374)

Answer 9

comprises all the parties that participate in the retail logistics process (i.e., manufacturers, wholesalers, third-party specialists, and retailer)

Question 10

collaborative planning, forecasting,
and replenishment (CPFR) (p. 374)

Answer 10

a holistic business practice that involves cooperation between trading partners in the supply chain to jointly plan, forecast, and manage inventory replenishment

Question 11

quick response (QR) inventory planning (p. 374)

Answer 11

a retailer reduces the amount of inventory it holds by ordering more frequently and in lower quantities

Question 12

floor-ready merchandise (p. 375)

Answer 12

items delivered to a store that are pre-tagged with UPC tickets containing essential information (style, size, type, color, and price) and placed on hangers, allowing them to be displayed immediately without additional preparation by retail staff

eg. Nordstrom does this with all its suppliers

Question 13

efficient consumer response (ECR) planning (p. 375)

Answer 13

a collaborative strategy in supply chain management that aims to optimize the entire grocery supply chain by making it more responsive to consumer demand while reducing unnecessary costs

Question 14

direct store delivery (DSD) (p. 376)

Answer 14

when some goods are shipped from suppliers directly to individual stores

Question 15

inventory management (p. 378)

Answer 15

to acquire and maintain a proper merch assortment while ordering, shipping, handling, storing, displaying, and selling costs are kept in check

Question 16

vendor-managed inventory (VMI) (p. 378)

Answer 16

where the supplier or manufacturer takes responsibility for managing and replenishing the inventory of their products at the customer’s location

eg. when Procter & Gamble (P&G) comes to Walmart to stock Pampers diapers

Question 17

inventory shrinkage (p. 379)

Answer 17

the loss of inventory that occurs when the amount of stock recorded in a business’s accounting system exceeds the actual physical inventory on hand

caused by theft, damage to products, admin recording errors, etc.

Question 18

electronic article surveillance (p. 379)

Answer 18

special tags that are attached to products to that the tags can be sensed by electronic security devices at store exits (anti-vol)

Question 19

reverse logistics (p. 380)

Answer 19

encompasses all merch flow from the customer and/or the retailer back through the supply channel

includes returned items, damaged/defective items, retailer overstocking, etc.