Chapter 11

Question 1

This may not sound egalitarian but it still a reasonable maxim in retailing.

Answer 1

“Buy low, Sell high”

Question 2

An important requisite of Merchandise management which entails excellent vendor relations.

Answer 2

Effective buying system

Question 3

These are used for merchandise that follows a predictable order-receipt-order cycle.

Answer 3

Staple Merchandise buying system

Question 4

This is technically not a buying system, per use, but a plan as it is so labeled.

Answer 4

Merchandise budget for fashion merchandise

Question 5

This system starts after the merchandise is purchased using the merchandise budget plan or staple merchandise system, which provides the buyer with a plan for purchasing merchandise.

Answer 5

Open-to-buy system

Question 6

These are typically allocated to different stores within the chain by the merchandise planner.

Answer 6

MERCHANDISE STOCKS

Question 7

These stores are usually given the lion’s share of merchandise allocation.

Answer 7

STORES LOCATED IN HIGH-TRAFFIC AREA

Question 8

These stores classily their stores as A, B, or C stores based on their historical sales records and potentials.

Answer 8

CHAIN STORES

Question 9

This is a method of rank-ordering merchandise to make inventory stocking decisions.

Answer 9

ABC ANALYSIS METHOD

Question 10

This is an inventory reduction attributed to shoplifting by customers or employees.

Answer 10

SHRINKAGE

Question 11

This method compares actual and planned sales to determine whether early markdowns are required or whether more merchandise is needed to satisfy demand.

Answer 11

SELL-THROUGH ANALYSIS METHOD

Question 12

This is a method for evaluating venders using a number of attributes.

Answer 12

MULTI-ATTRIBUTE MODEL

Question 13

These are crucial in buyers’ discussions with vendors, with buyers negotiating for lower buying price of merchandise, against vendors who are negotiating for higher selling price.

Answer 13

NEGOTIATIONS

Question 14

This also known as a partnership relationship, is formed when a retailer and vendor are committed to maintaining the relationship over the long-term and investing in opportunities that are mutually beneficial to them.

Answer 14

STRATEGIC RELATIONSHIPS

Question 15

This, is the percentage reduction in the initial retail price, which may be due some changes in the marketing environment.

Answer 15

MARKDOWNS

Question 16

“Buy low, Sell high” may not sound egalitarian but it is still a reasonable maxim for retailing.

Answer 16

TRUE

Question 17

There are two distinct buying systems that help buyers and merchandise planners determine how much to buy.

Answer 17

TRUE

Question 18

Merchandise budget plan for fashion merchandise (MBFM) is technically not a buying system, but a plan as it is so labeled.

Answer 18

TRUE

Question 19

The first step in ABC analysis is to rank-order SKUs using one or more criteria or attributes.

Answer 19

TRUE

Question 20

In buying merchandise, negotiations between buyers and vendors usually take place.

Answer 20

TRUE

Question 21

Tips or guidelines for buyers of merchandise before and during negotiations with vendors:

Answer 21

• INTENSIVE PREPARATION IS CRUCIAL
• EVALUATE PRESENT SITUATION
• COMMUNICATE WITH CANDOR, TRUST, AND MUTUAL RESPECT FOR EACH OTHER’S POINT OF VIEW OR POSITION.
• PLAN TO HAVE AS MANY NEGOTIATORS AS THE VENDOR’S
• SET YOUR OWN GOALS AND CONSTRAINTS
• IDENTIFY COMMON GOALS AND CONSTRAINTS THAT BOTH PARTIES CAN LIVE WITH
• KEEP AN OPEN MIND AND INVENT OPTIONS FOR MUTUAL GAIN

Question 22

Give at least 3 of the four pillars of a successful strategic relationship.

Answer 22

• MUTUAL TRUST
• OPEN COMMUNICATION
• SHARED VISION
• SHARED COMMITMENTS

Question 23

What is an integral element of the retail marketing mix?

Answer 23

Price