1.Ian’s job at the Nordstrom distribution center is to place some of the incoming apparel on hangers in size

order before rolling them down to be ticketed. Ian is preparing the merchandise to be


B.sorted and repacked for the conveyor.


D.ready for logistics.

2.Which of the followingbestdescribes the goal of supply chain management?

A.To maximize retailers’ profits by reducing costs while satisfying service levels that their customers require.

B.Reducing costs by allocating merchandise.

C.Maximizing retailers’ profits by reducing system wide costs, while achieving the highest service level (product availability).

D.Minimizing system wide costs while satisfying the service levels (product availability) that customers desire.

3.A retailer can work to retain employees and build a mutual commitmentbestby

A.reducing its fixed costs.

B.promoting the company.

C.treating employees all the same.

D.empowering employees.

4.Although retailers gain economies of scale from opening multiple locations in an area, they also suffer

diminishing returns associated with locating too many additional stores in an area. This is called

A.channel integration.

B.economies of scope.

C.sales cannibalization.

D.channel competition.

5.What type of product will a consumer look for without regard to time, money, or effort?

A.Specialty product

B.Impulse product

C.Comparison product

D.Time-crunch product

6.Howard thought his expense control problems were resolved when he decided he would hire sales clerks

from the local high school, and pay them minimum wage at his profession golf shop. Which of the

following statements isprobably trueof Howard’s decision?

A.Young energetic enthusiasm will help Howard’s sales.

B.He will probably have higher turnover, absenteeism and poor labor productivity.

C.Since high school students are inexperienced, it is justified to pay minimum wage.

D.No one works for minimum wage.

7.Which of the following leases aremostcommonly used by community and neighborhood centers?

A.Pro bono lease

B.Percentage lease

C.Variable-rate lease

D.Fixed-rate lease

8.Many companies are capitalizing on people being at the airports longer and not able to carry on much for

personal health and beauty aids. A vending machine selling cosmetics and perfume at an airport is a

A.parasite store.


C.timed leased agreement store.

D.store within a store.

9.What type of retailer wouldmostlikely benefit from the use of direct store delivery?

A.A large department store

B.A big box discount store

C.A big box electronics retailer

D.A supermarket

10.Some U.S. retailers have a competitive advantage in global markets because

A.there is little competition in European, Asian and South American markets.

B.the market in the U.S. is saturated.

C.overseas markets readily welcome U.S. retailers.

D.the American culture is emulated by young people.

11.What would the employee turnover be if the store had 10 positions for management trainees and four

left during the year?

A.20 percent

B.40 percent

C.60 percent

D.140 percent

12.Barehugs is popular loungewear that prides itself on its versatility. Last year, its net sales were

$1,750,000 with cost of goods of $390,000. Taxes totaled $61,650. The company’s expenses totaled

$960,000. Calculate the company’s net after tax profit margin percentage.

A.80.7 percent

B.22.2 percent

C.19.3 percent

D.12.5 percent

13.Which of the following doesnotindicate conditions that lead to intense rivalry that adversely affect a

retailer who wants to enter the market?

A.High fixed costs

B.Slow growth

C.A lack of perceived differences between competing retailers

D.A large number of retailers with different sizes

14.Which of the following statements describing market penetration growth strategy isfalse?

A.It involves using the existing retail format in new market segments.

B.It includes keeping existing stores open for longer hours.

C.It involves displaying merchandise to increase impulse purchases and training salespeople to cross-sell.

D.It involves realizing growth by directing efforts toward existing customers using the retailer’s present retailing format.

15.Which of the following statements about the Huff Gravity Model isfalse?

A.It is assumed that a larger size is generally more attractive in consumers’ eyes because it means more merchandise assortment

and variety.

B.The greater travel time or distance for the consumer, compared with that of competing locations, the higher probability that the

consumer will shop at the location.

C.It predicts the probability of a customer going to a specific store location.

D.The formula indicates that the larger the size of the store compared with competing stores’ sizes, the greater the probability

that a customer will shop at the location.

16.You’re about to loan a friend $10,000 to start a candy store in a central business district. Where can

you find information about how he plans to build a sustainable advantage?

A.The retail market strategy

B.The organizational mission statement

C.The organizational chart

D.The objective part of the retail plan

17.Which of the following ratios is included as an integral part of the strategic profit model?

A.Current liabilities

B.Inventory turnover

C.Retained earnings

D.Net profit margin

18.Which of the following isnotconsidered a barrier to entry in a market for a retailer?

A.Market dominated by a few large competitors with scale economies

B.Market with no good locations

End of exam

C.Market with many vendors

D.Market dominated by a well-established retailer that has developed a loyal group of customers

19.Which of the following statements describing adjacent tenants isfalse?

A.Complementary retailers target the different market segments and have a different, noncompeting merchandise offering.

B.The principle of cumulative attraction states a cluster of similar and complementary retailing activities have greater drawing

power than isolated stores.

C.Complementary adjacent retailers have the potential to build traffic.

D.Competing adjacent retailers have the potential to build traffic.

20.Schnuck’s Grocery Store is located in St. Louis, Missouri. The owner has taken a map and has drawn

three different sized shapes around the store’s location. Those people that are located in only the largest

shape being beyond a 15-minute drive radius of the store are in what’s referred to as the store’s

A.geographic market.

B.delineated market.

C.market trading area.

D.tertiary trading area.