Retail Management Exam

Name:

PENN FOSTER COLLEGE

Date:

Retail Management Proctored Final Examination

INSTRUCTOR USE ONLY

GRADE GRADED BY

YOUR STUDENT NO.

I I I I I I EXAMINATION NO.

080627

Part A: Answer two of the following three essays in one or two paragraphs. Each answer is worth 15 points.

1. How can a small sporting goods store compete in a market with Walmart and still thrive?

2. Identify and describe the two important issues in the design of a large retail

organization.

3. Prior to meeting with a vendor, a buyer will analyze their business and prepare to discuss certain areas with them. What does the buyer and vendor discuss during

their meetings and what types of things might be negotiated?

Part B: Answer each of the following questions in two to four sentences. Each answer is worth 4 points.

1. With manufacturers legally able to sell direct from the factories, why should retailers exist?

2. Explain multichannel retailers' impact on cannibalization and share of wallets.

3. Why are category killers and supercenter retailers best suited to succeed internationally?

(Continued on reverse side)

PE2136(1302)

Proctored Final Examination

4. Why is choosing a good location such an important decision for a retailer?

5. Often, when retailers' sales and profits decline due to increased competition, they

respond to decreasing labor costs by reducing the number of sales associates, hiring

more part-timers and spending less on training. What is wrong with this strategy?

6. What is a customer lifetime value (CLV), and how is it estimated?

7. If there are so many advantages to carrying private brands, why do retailers even bother to sell national brands?

8. Why is marginal analysis the most economically correct method for setting communication budgets, and why is it still a challenge for retailers to use this

method?

9. Newman is opening a produce market in his neighborhood. What suggestions would you make for him in regards to effectively using signage?

10. What factors should be considered in locating stores? Why should retailers consider

those factors?

Part C: Circle the letter of the correct answer to each question or statement. Each answer is worth 3 points.

1. The reason why movie theaters sell tickets for an afternoon showing of a movie at a

lower price than the 7:00 PM showing of the same movie is

a. to deal with the perishability of services. b. to make sure the service offered is consistent. c. to deal with the intangible characteristic of services. d. to deal with the incompatibility characteristic of services. e. to minimize inventory losses.

2. Commuters who speed to work might find it handy to have a radar detector. By own-

ing one of these, a commuter can know when her car was being monitored for speed, and can slow the car accordingly. The radar detector would satisfy a need.

a. psychological b. motivational c. utilitarian d. physiological e. social

Proctored Final Examination

3. Hosting a website for the purpose of online retailing would be classified as a/an

a. cost of goods sold. b. operating expense. c. promotional allowance. d. profit center. e. asset productivity center.

4. At the Mall of America, all of the children's specialty stores are on the ground floor and

are near the restaurant Rainforest Cafe, which also targets parents with children. This would be an example of the principle of

a. multiple risk. b. analog approach. c. cumulative attraction. d. consumer spotting. e. diminishing adjacent.

5. ____ is the aspect of supply chain management which refers to the planning, implementation, and control of the efficient flow and storage of goods, services,

and related information. It follows the process from the point of origin to the point

of consumption to meet customers' requirements.

a. Logistics b. Total quality management c. Warehousing d. Distribution e. Material flow management

6. A catalog retailer of kitchen items that sells aluminum muffin pans has found that

some weeks it sells 40 pans, and other weeks it sells none. A reorder can take up to three weeks. The probability of running out of pans and alienating its customers can

be alleviated by maintaining

a. nonledgered stock. b. cycle stock. c. hidden inventory. d. backup stock. e. lead stock.

7. Anne Marie made an effort to stop into the Walgreen's on her way home from work each Friday to pick up a gallon of milk since it was priced cheaper than her local

grocery store. In this case, the milk is an example of Walgreen's use of

a. stimulus pricing. b. leader pricing. c. follow-up pricing. d. price lining. e. odd pricing.

Proctored Final Examination

8. Donna is the sales manager at a store that sells musical instruments. She has developed

a job description for each of her employees. These job descriptions will be used for all of

the following, except

a. recruiting new sales help. b. training both experienced and inexperienced retail salespeople. c. helping her select the person most suited to the retailing job that needs to be filled. d. evaluating the sales performances of her employees. e. compensating employees.

9. When Autumn called the plumber to repair a leak under her kitchen sink, she called the most reputable plumber in her community. After the plumber said he was finished, she

paid the bill and went about her business. The next day, Autumn saw water coming from beneath the sink and was stunned to see the repair was done with a strip of duct tape.

This is an example of a/an

a. faulty service agreement. b. attitudinal bias. c. assumption response. d. service gap. e. motivational guide.

10. As the manager of the home department at a large retail store, Madison looks forward

to a periodic , which she receives on the basis of her department's performance

relative to its budgeted sales and profits.

a. bonus b. commission c. gratuity d. fringe benefit e. perquisite

Proctored Final Examination