Retail Operations Management Exam Practice Tests
Course Introduction
Retail Operations Management explores the strategies, processes, and best practices involved in the efficient running of retail businesses. The course examines topics such as store layout and design, inventory management, supply chain coordination, merchandising, customer service, and the integration of technology in retail settings. Students learn how to analyze operational issues, optimize resource utilization, and improve the customer experience while balancing costs and maximizing profitability. Through case studies and real-world examples, the course provides insights into current trends in retail operations and prepares students to tackle challenges faced by todays dynamic retail environment.
Recommended Textbook
Retail Management A Strategic Approach 13th Edition by Barry R. Berman
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20 Chapters
2240 Verified Questions
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Page 2
Chapter 1: An Introduction to Retailing
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Sample Questions
Q1) Competition among retailers selling the same goods and services is highest in which form of distribution?
A) intensive distribution
B) exclusive distribution
C) selective distribution
D) vertical integration
Answer: A
Q2) The functional orientation to the study of retailing stresses ________.
A) retail activities
B) retail planning
C) adaptation of retail strategy to match the retail environment
D) opportunities and constraints in decision making
Answer: A
Q3) A retailer sells to multiple retail formats and multiple points of contact.This illustrates
A) vertical integration
B) the sorting process
C) omnichannel retailing
D) the importance of impulse retailing
Answer: C
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Chapter 2: Building and Sustaining Relationships in Retailing
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Sample Questions
Q1) A retailer bases its overall customer service strategy on providing a 7-day return policy,having sufficient quantities of advertised goods on hand,and well-lit parking areas.The retailer's retail strategy can be described as a(n)________.
A) optimal retail strategy
B) augmented retail strategy
C) expected retail strategy
D) potential retail strategy
Answer: C
Q2) In micromerchandising,retailers seek to match local assortments to the needs of the population that each store serves.Thus,a supermarket located near a college may feature dormitory supplies,while a store located in a family area may feature discounts on frozen foods.Micromerchandising is a form of ________.
A) value-oriented strategy
B) adaptation strategy
C) category management
D) consumerism
Answer: C
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4
Chapter 3: Strategic Planning in Retailing
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Sample Questions
Q1) A retailer is interested in increasing its operating efficiency from 30 to 40 percent.If its sales revenues are $500,000,it must seek to reduce its operating expenses by $100,000.
A)True
B)False
Answer: False
Q2) An advantage of buying an existing business versus starting a new business is ________.
A) no cost for goodwill
B) no time lag before opening
C) favorable lease terms
D) flexibility in developing and changing a retail strategy
Answer: B
Q3) In which management format does planning tend to be more formal and systematic?
A) centralized structure
B) corporate
C) professional manager system
D) owner-manager system
Answer: C
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Page 5
Chapter 4: Retail Institutions by Ownership
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Sample Questions
Q1) a.Discuss the concept of constrained decision making as applied to franchising.
b.Describe how a franchisor can legally limit the discretion of franchisees.
c.Why is constrained decision making so important to franchisors and franchisees?
Q2) How can an independent retailer compete against chains? Specifically address the following advantages of chains: high bargaining power,efficiency in multiple store operations,the use of computers,and access to media.
Q3) Manufacturers/service sponsors can exert channel control through ________.
A) franchising
B) private branding
C) fair practice legislation
D) store loyalty
Q4) While retailing is dominated by independents in terms of percent of retail units,it is dominated by chains in terms of retail sales dollars.Explain this statement through the concepts of ease of entry and the competitive advantages and disadvantages of chains versus independents.
Q5) Develop a detailed checklist for a prospective franchisee in evaluating a franchise.
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Chapter 5: Retail Institutions by Store-Based Strategy Mix
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Sample Questions
Q1) Differentiate among the retail strategy mix of variety stores,traditional department stores,and full-line discount stores.
Q2) A combination store consists of a supermarket and a leased department general merchandise store operator.
A)True
B)False
Q3) Which retail institution has the most selection of any general merchandise retailer?
A) full-line discount store
B) factory outlet
C) variety store
D) department store
Q4) The food-oriented retailer with the greatest width of assortment is the ________.
A) conventional supermarket
B) supercenter
C) combination store
D) food-based superstore
Q5) Discuss the retail strategy mix of a membership club and a flea market.
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Chapter 6: Web, nonstore-Based, and Other Forms of Nontraditional Retailing
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Sample Questions
Q1) The "30-day rule" most directly relates to which stage of a direct marketing strategy?
A) presenting the message
B) measuring results
C) maintaining the database
D) order fulfillment
Q2) The first step in developing a direct marketing strategy is ________.
A) generating customers
B) business definition
C) customer response
D) maintaining the database
Q3) A major advantage of the use of the World Wide Web over paper-based catalogs is the ability of a retailer to immediately change pricing and product availability information.
A)True
B)False
Q4) a.Describe the major advantages of buy online and pickup in store from a consumer's perspective.
b.Describe the major advantages of buy online and pickup in store from a retailer's perspective.
8
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Chapter 7: Identifying and Understanding Consumers
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Sample Questions
Q1) Many Web shoppers also buy from catalog retailers,department stores,and specialty stores.This illustrates ________.
A) diversified shopping
B) routine decision making
C) cross-shopping
D) cross-selling
Q2) Brand and store loyalty are examples of limited decision making.
A)True
B)False
Q3) Over half of U.S.adults have a 4-year college degree.
A)True
B)False
Q4) The study of motivation is easy since consumers may buy the same product for different reasons,may have subconscious motivations,and may not tell the retailer their real reasons for product/service purchases.
A)True
B)False
Q5) a.Provide a demographic snapshot of the United States. b.Identify its implications for an independent bookstore.
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Chapter 8: Information Gathering and Processing in Retailing
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Sample Questions
Q1) A retailer determined that its monthly sales were 22 percent below expectations on the basis of its retail plan.Which stage of the marketing research process should the retailer be concerned with?
A) making recommendations
B) defining the problem
C) analyzing primary data exception reports
D) implementing findings
Q2) An example of external secondary data is ________.
A) a new market research study conducted by an independent market research company
B) a new market research study conducted by the firm's market research department
C) company-based inventory records
D) annual reports of competitors
Q3) A frequent-shopper program is an example of ________.
A) electronic data interchange
B) market research
C) database management
D) data mining
Q4) Develop a semantic differential scale to determine Starbuck's retail image.
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Chapter 9: Trading-Area Analysis
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Sample Questions
Q1) A diversified economic base protects retailers from risks inherent in a single-industry town.
A)True
B)False
Q2) Which computer-based system classifies and describes communities by lifestyle clusters?
A) American Community Survey
B) Editor & Publisher Market Guide
C) Nielsen Researcher
D) Nielsen's PRIZM
Q3) A major benefit of a trading-area analysis is that it allows a retailer to determine
A) the demographic and socioeconomic characteristics of consumers
B) a store's image
C) the psychographics of shoppers versus nonshoppers
D) the response of shoppers to promotional pricing
Q4) The point of indifference is a critical statistic in a gravity model.
A)True
B)False
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Chapter 10: Site Selection
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Sample Questions
Q1) A percentage lease is the simplest form of lease to negotiate and implement.
A)True
B)False
Q2) Which planned shopping center is most similar to the central business district?
A) community shopping center
B) neighborhood shopping center
C) regional shopping center
D) string
Q3) The addition of retail stores to a shopping center increases the trading area for each store.This indicates that ________.
A) trading-area overlap exists between the old and new retailers
B) the retail area is saturated
C) the new stores are parasites
D) store affinities exist between the new and existing stores
Q4) The kinds of goods and services sold in a secondary business district are similar to those found in a neighborhood business district.
A)True
B)False
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Chapter 11: Retail Organization and Human Resource Management
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112 Flashcards
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Sample Questions
Q1) Retail training techniques such as role playing and behavior modeling are particularly well suited for store operations personnel.
A)True
B)False
Q2) The most complex organization forms are found in diversified retailers.
A)True
B)False
Q3) The distinct needs of branch store customers are most recognized in which form of retail organization?
A) equal store
B) multiline retail organization
C) main store control organization
D) separate store
Q4) A major disadvantage with the modern version of the Mazur plan is that ________.
A) the distinction between functional areas may be unclear
B) the distinction between line and staff executives may be unclear
C) salespeople report to a buyer who is not on the selling floor
D) it is generally implemented through a tall organization
Page 13
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Chapter 12: Operations Management: Financial Dimensions
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112 Flashcards
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Sample Questions
Q1) A firm's collection period needs to be evaluated on the basis of its percent of credit sales.
A)True
B)False
Q2) An example of a hidden asset to a retailer is ________.
A) a long-term relationship with a supplier
B) goodwill paid by the retailer in a recent acquisition
C) valuable depreciated real-estate
D) a valuable warehouse recently purchased at its appraised value
Q3) Financial leverage equals ________.
A) total assets divided by net worth
B) total assets divided by total liabilities
C) total current assets divided by total current liabilities
D) (net worth - total assets) divided by net sales
Q4) Top-down budgeting represents a decentralized budgetary process.
A)True
B)False
Q5) A retailer's net worth is computed as its assets less its fixed liabilities.
A)True
B)False
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Chapter 13: Operations Management: Operational Dimensions
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Sample Questions
Q1) Rationalized retailing is often conducted in conjunction with ________.
A) micro-merchandising
B) electronic data interchange (EDI)
C) decentralized management
D) prototype stores
Q2) Supermarkets and full-line discount stores have effectively reduced personnel costs through the use of ________.
A) self-service facilities
B) prototype stores
C) vertical merchandising
D) just-in-time inventory management
Q3) Through ________,an employee can be easily shifted from stockperson to cashier as the need arises.
A) cross-training
B) rationalized retailing
C) risk-minimization retailing
D) job standardization
Q4) Describe five types of management reports that can be generated through the use of an electronic-point-of-sale system.
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Chapter 14: Developing Merchandise Plans
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Sample Questions
Q1) A vertical fashion trend occurs when a fashion ________.
A) is not successful when passed down to the mass market
B) is first accepted by an upscale market segment, but undergoes changes in its basic form as it is sold to the general public
C) is passed from the lower to the upper social classes
D) retains its basic form as it is accepted by the general public
Q2) Distinctive,emulation,and economic emulation are three stages in the ________.
A) diffusion of innovation theory
B) fashion emulation theory
C) vertical trend theory
D) horizontal trend theory
Q3) Which retail assortment strategy is used by a specialty store?
A) narrow and deep
B) narrow and shallow
C) wide and shallow
D) wide and deep
Q4) The store type with the greatest depth of assortment is a specialty store.
A)True
B)False
Q5) Develop a merchandising plan for fad merchandise.
Page 16
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Chapter 15: Implementing Merchandise Plans
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Sample Questions
Q1) A retailer can most effectively reduce its inventory risk through ________.
A) memorandum purchases
B) consignment purchases
C) floor-ready merchandise
D) private label purchases
Q2) A disadvantage to the use of frequent ordering in small quantities is the ________.
A) loss of quantity discounts
B) high investment costs
C) high insurance costs
D) high storage costs
Q3) Electronic article surveillance seeks to directly reduce inventory shrinkage by ________.
A) using cameras to monitor dressing room activity
B) reducing theft on specific items that have been targeted by management
C) setting up strict rules on the number of goods that can be tried on in dressing rooms at one time
D) chaining expensive clothes together to reduce theft
Q4) a.Explain the differences between RFID and UPC.
b.Why have retailers been slow to adopt RFID?
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Chapter 16: Financial Merchandise Management
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Sample Questions
Q1) An electronics store estimates that it can sell 2,000 memory cards each year.Each card costs the store $7.00; holding costs equal 20 percent of unit costs and order costs are $10 per order.The economic order quantity is ________.
A) 12 cards
B) 122 cards
C) 140 cards
D) 169 cards
Q2) A retailer's total merchandise available for sale (at cost)is $245,000; the total merchandise available for sale at retail equals $300,000.Its cost complement is 0.82.
A)True
B)False
Q3) The adjusted ending retail book value multiplied by the cost complement equals the ending inventory value at cost.
A)True
B)False
Q4) Discuss the advantages and limitations of the retail method of accounting in comparison to the cost method.
Q5) Differentiate between dollar and unit control.
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Chapter 17: Pricing in Retailing
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Sample Questions
Q1) In vertical price fixing,________.
A) channel members conspire to set retail prices at given levels
B) channel members agree not to sell merchandise below their cost
C) retailers have no intention of selling advertised goods
D) manufacturers or wholesalers are able to control the retail prices of their goods and services
Q2) What is the role of demand-,cost-,and competition-oriented pricing in developing and implementing a price strategy?
Q3) Which pricing strategy seeks to stabilize demand throughout the year?
A) variable pricing
B) everyday low pricing (EDLP)
C) one-price policy
D) flexible pricing
Q4) Item price removal enables supermarkets to ________.
A) mark prices for goods on shelves or signs and not on individual items
B) charge the higher of two prices, if two prices are on a single package
C) sell goods for below cost if they are matching a nearby competitor
D) selectively mark prices on "key" items only
Q5) Develop a checklist for use by a computer retailer for effective markdown control.
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Chapter 18: Establishing and Maintaining a Retail Image
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Sample Questions
Q1) An ensemble display is an example of a purchase motivation product grouping.
A)True
B)False
Q2) Develop an experiential merchandising program for a clothing store catering to college students.
Q3) A ready-to-heat meal offered for sale by a supermarket is an example of ________.
A) experiential shopping
B) impulse sales
C) cross-merchandising
D) solutions selling
Q4) a.What are the advantages of a retailer's determining space needs using a model stock approach? ...the sales-productivity ratio?
b.What are the disadvantages of a retailer's determining space needs using a model stock approach? ...the sales-productivity ratio?
Q5) a.Contrast the advantages and disadvantages of straight versus curving traffic flows.
b.In what situations would you use each technique?
Q6) Develop a solutions selling program for a regional supermarket chain.
Page 20
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Chapter 19: Promotional Strategy
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Sample Questions
Q1) The most complex method of establishing an overall promotional budget is the ________.
A) objective-and-task method
B) percentage-of-sales technique
C) incremental method
D) all-you-can-afford method
Q2) Noncompeting retailers can share advertisements in media with broad geographic circulation.This strategy represents a ________.
A) competitive advertisement
B) pioneer advertisement
C) vertical cooperative advertising agreement
D) horizontal cooperative advertising agreement
Q3) In cooperative advertising,________.
A) a trade association promotes the advantages of a new product in order to increase sales
B) two or more channel members share promotional costs
C) a retailer promotes a manufacturer's brand as being on sale
D) a retailer promotes its own dealer brand as being on sale
Q4) a.Describe the importance of both reach and frequency in terms of media choice.
b.How can a retailer increase both reach and frequency with a constant budget?
21
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Chapter 20: Integrating and Controlling the Retail Strategy
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Sample Questions
Q1) Contingency plans should be based directly on ________.
A) gap analysis
B) benchmarking
C) scenario analysis
D) strategic planning
Q2) A sales opportunity grid can be used in conjunction with direct product profitability analysis.
A)True
B)False
Q3) An advantage of using a company audit specialist in performing the retail audit is
A) high degree of auditor independence
B) high degree of objectivity
C) level of knowledge about the retailer
D) low cost for a small retailer
Q4) Audit forms generally resemble ________.
A) management reports
B) questionnaires
C) computer printouts
D) survey research data
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