CPCM Study Guide Flashcards
True or False. Assortment planning technology can optimize product selection by filtering options to generate tailored plans that match retailers product classification strategies
TRUE
Which of the following is the biggest limitation to applying Activity Based Costing?
The ability for Retailers to track/measure detailed cost data
What of the following statements BEST describes Activity Based Costing (ABC)?
A method to more accurately identify Overhead Costs when they are not tied to Direct Labor
What is the correct formula for GMROII?
Annual Profit/Average Inventory Cost
Which of the following descriptions does not describe activity-based costing?
A model that spreads the cost of a company’s activities evenly across all the company’s products. The costs are not allocated evenly across all products, but according to the amount that is consumed.
Which of the following most accurately describes Incremental Contribution? (Select the best answer)
Identifies the additional Category Volume from adding a particular item
A supplier decides to introduce a new product size in Brand A, which is a 12-pack of smaller-sized products than the original lineup. What is this an example of?
Product line extension. Because it’s a new item in the same brand in a different size.
True or False. Shopper loyalty card information is always included in syndicated scanner data
FALSE
True or False. Vendors can create external data references to their syndicated scanned sales data from Nielsen or IRI
FALSE
Which of the following is the LEAST important consideration as it relates to creating a monthly store-level report that needs to be refreshed monthly with updated syndicated scanner data
Identify a contingency plan in case the data vendor databases go off-line
The data cube describes market facts along what 3 dimensions for a specific data measure (example % ACV)?
Product, geography, time period
True or False. Syndicated scanner data (derived by Nielsen or IRI) is sometimes considered incomplete because not all retailers in a market share their data
TRUE
Which of the following is the best analysis that you can perform through purchase frequency and shopping basket information in retail point of sale
Shopper insight analysis
What is Brand X’s purchase frequency if it has a total of 5,255 trips and 2,160 buying households?
2.4.
The formula is: purchase frequency = total number of trips (5,255) / buying households (2,160) = 2.4 purchase frequency
The “share of requirements” or “share of wallet” measures the extent to which a product satisfies a consumer’s requirements in a category. What is another term for this measure?
Product loyalty
Which of the following is an example of buyer conversion?
A widget category shopper usually buys widgets at Retailer X. While doing his grocery shopping at Retailer Y, he notices a floor display and decides to buy his widgets at Retailer Y instead of Retailer X.
What is the foundational data element used to organize and measure product performance in household panels?
UPC
A retail category manager analyzed the % of dollars they were capturing in the widget category, and the % they were losing to competition. Which of the following best describes this type of analysis?
Leakage analysis
. What is the share of category sales for Brand X given the following information:
Brand X $ sales = $225,000
Brand X unit sales = 50,800
Category $ sales = $984,000
The formula is: Brand X $ sales ($225,000) / Category $ sales ($984,000) = Share of category sales (22.9)
What is the difference between buyer conversion and leakage?
Buyer conversion measures the percentage of category buyers lost to other stores and leakage measures the percentage of category dollars lost.
Which innovation has most significantly advanced the grocery retailer’s control of the distribution channel?
The development of scanners and the UPC codes
Which of the following analysis examples is NOT enabled by the use of retailer’s POS data?
Competitive pricing analytics
True or false. Loyalty data has little to no value when creating store clustering.
FALSE
Why would you need to “cleanse” point-of-sale data you receive from a retailer?
The data must be checked for discrepancies and errors
Which of the following is the LEAST important requirement to establish effective retail store clusters?
Increased reliance on multiple data sources
True or false. Retail “store clustering” and “geographic grouping” are terms for the same thing.
FALSE
True or false. Retailer point of sale data is available in a consistent and standardized format across different retailers
FALSE
When determining product assortment and considering how it affects the shelf, what are the two most important factors that retailers need to consider
Variety of items and shelf capacity
Retailer X has listed a new “Brand X” on in its category assortment. This brand is a value-priced brand, similar to the more expensive Brand Y brand the retailer already carries in the category. What would be the best place to shelve these two brands to maximize sales
Retailer X should not place the brands adjacent to each other on the shelf to avoid trading down from Brand Y to the less expensive Brand X
Product A has 6 facings and holds 6 units per facing. Its weekly movement is 10 units per week (520 units per year). What are the inventory turns for Product A?
14.4
520 units per year / (6 facings x 6 units per facing) = 14.4
Of the following benefits to planogram development for retailers and manufacturers, which one LEAST benefits the all-important shoppers?
Maximizes ROI on the space utilized
The bottom shelf in a gondola is usually deeper than the other shelves, and has more:
Shelf capacity
Which of the following statements is LEAST accurate as it relates to shelf management?
Store level sales data should not be used in the development of planograms
Retail scanned sales data usually includes which of the following types of information?
Dollar and unit sales, profit, transactional, basket and time aggregates.
Which of the following attributes is not customarily used to create store clusters?
Shelf inventory
Review the table that shows results of an in-store test. Which is the correct conclusion you can draw from this data?
The test stores performed better than the control stores by 12%
Which of the following analytics is NOT available in retailer scanned sales data?
Market shares. Through a compilation of banners in the data
Which of the following retail scanned sales data components allows retailers to track organic growth in their business (or all stores ex new store openings)?
Comp stores
Refer to the diagram. Which brand is most reliant on TPR sales?
Brand B
Which of the following measurements can be MOST influenced by ghost inventory, visual out of stocks, and location of inventory in the store?
In stock/Out of stock
Following is some information about the “mid/upscale suburbs Age 18-34 with kids” demographic segment for the market and for store #55. Calculate the demand index based on this information and select the best answer (including demand index and interpretation from the answers below.
% households in market: .28
% households for store #55: 3.33
1189 demand index, indicating the store has a high % of households in the mid/upscale suburbs with kids relative to the market.
Which of the following BEST describes what a product demand index measures?
The potential to have high demand for the product
True or false. A demand index measures whether the target product group has been sold in a store.
FALSE
You know that a specific consumer demographic is a target consumer for a manufacturer. What would be the best approach (using geodemographics) to identify the best stores to carry this product?
Use data management software to identify stores with heavy concentrations of the target consumer demographic
Calculate the “Sales Index” based on the following information. (Hint: Calculate store sales per $MM ACV first)
Store sales= 10,000
Store ACV= $25,000
66
Too much data can overwhelm anyone who is analyzing data. What is the best way to approach large data sets
Focus on key business issues
Which of the following dimensions would NOT add value in a category health assessment?
All would add value to the assessment
True or False. You should not segment item level data unless you have a properly researched consumer decision tree
FALSE
What are the four key areas (or perspectives) that should be considered in a category review (also known as the “4 C’s”)?
Consumer, Category, Company, Competition
How do you determine fair share of features for a brand?
Share of features for that brand divided by the brand’s dollar share within the category
What is a causal factor tree?
It is a process used to determine how to perform a root cause analysis
Why would a category manager need to use a cause and effect diagram?
To help identify, explore, and display possible causes related to a problem or condition
Refer to the table. in which two segments is the retailer losing the most market share
Ground and Large
Index vs ACV” calculations are an effective way for retailers to benchmark themselves against the market. What is ACV and how is it calculated?
All commodity volume, calculated by summing up all category sales within an area to get a total ACV number
Name the four best drivers that a category manager should understand when assessing display performance
Reach, Response, quality, frequency
information collected from shoppers who scan their purchases with hand held reader that automatically uploads the information to a syndicated data provider
Household panel data
In-depth surveys, focus groups, observational, video monitoring, and ethnographic research
Qualitative & quantitative research
Information collected by observing shoppers while they shop, then asking them a defined set of questions
In-store shopper research
What is the difference between scanner data and panel data?
Scanner data helps you understand what has happened to a brand’s sales and share, while panel data helps you understand why a brand’s sales and share have declined or increased
Data gathered from the individually recorded transactions of thousands of retailers, compiled into a database
Syndicated Scanned data
A retailer’s income statement captures cash discounts from manufacturers in what section?
Other income
Which line on the balance sheet captures merchandise inventory?
Current Assets
if an item has average inventory levels of %75,000 and annual cost of goods sold of $450,000, what is its inventory turns
6
Cost of goods sold/average inventory
If an item has a cost of $4.00 and a retail price of $7.50, what is its markup % (round to 1 decimal place)?
87.5 (Work= (Retail Price — Cost) / Cost = ($7.50-$4.00/4.00))
True or False. Category managers can influence gross profit through retail price and unit cost
TRUE
The lost sales from theft are accounted for in the income statement by:
Deducting it from sales as Shrink
