A retailer with a relatively large trading area and higher than average profitability is most likely to have which type of store location?
. A retailer with a relatively large trading area and higher than average profitability is most likely to have which type of store location?
a. saturated
b. understored
c. overstored
d. oversaturated
Q2. Two types of stores can have different trading areas even though they are located in the same shopping district/center.
a. true
b. false
Q3. The traditional means of trading-area delineation for a new store is _____.
a. Huff’s model
b. Gautschi’s model
c. license-plate analysis
d. Reilly’s law of retail gravitation
Q4. A supermarket has developed an analog model to aid in its site-selection process. The model contains variables such as _____.
a. traffic counts, visibility, and manager ability
b. trading-area population and expected market share
c. disposable income, retail sales, and population
d. competition, store size, and total retail sales
Q5. A major disadvantage to the use of census data in trading-area analysis is its _____.
a. cost
b. being limited to city and state data
c. lack of comprehensiveness
d. dated nature
Q6. Current traffic patterns (both vehicular and pedestrian) can be used to delineate the trading area of a new store.
a. true
b. false
Q7. A department store in a major shopping center can be classified as a(n) _____ store.
a. parasite
b. destination
c. unsaturated
d. saturated
Q8. The primary trading area can be delineated in Huff’s law of shopper attraction by studying the _____.
a. probability of consumers shopping at a location
b. point of indifference between two communities
c. average purchase made by consumers
d. traffic counts in different locations
Q9. The trading area with the highest average purchase by a customer is the _____.
a. parasite
b. primary trading area
c. secondary trading area
d. fringe trading area
Q10. Primary, secondary, and fringe trading areas for an existing store can be described on the basis of _____.
a. trading-area overlap with existing stores
b. the average dollar purchases at a store by people from given geographic locales
c. customer attitudes
d. the frequency of large orders
Q11. The description of a trading area is the first stage in an analysis of a retail store location.
a. true
b. false
Q12. An example of an economic trading-area barrier is _____.
a. travel distance
b. travel time
c. high sales-tax rates
d. travel difficulty as measured by road conditions
Q13. The major assumptions of Reilly’s law are that two competing areas are equally accessible from a major road and that _____.
a. each city has an equal population
b. each city is equally distant from shoppers at the point of indifference
c. retailers in the two cities are equally effective
d. consumers are willing to travel for lower prices
Q14. Leases for retail locations are often so complicated due to _____.
a. the need to protect creditors
b. their long time duration
c. tax laws
d. rent regulations on a federal, state, and municipal level
Q15. A retail area with a perfect level of balanced tenancy is a(n) _____ area.
a. understored
b. saturated
c. overstored
d. charted
Q16. Which of these location forms is unplanned as a unit?
a. regional shopping center
b. neighborhood shopping center
c. community shopping center
d. central business district
Q17. A practice that combines some of the benefits of owning and leasing store locations is the _____.
a. net lease
b. graduated lease
c. sale-leaseback
d. maintenance-increase-recoupment lease
Q18. A location classified as a one-hundred percent location for one retailer would be a one-hundred percent location for all retailers.
a. true
b. false
Q19. Corner influence is generally positive due to _____.
a. larger trading areas
b. better retail balance
c. higher levels of affinity
d. greater visibility
Q20. A pedestrian traffic count for a fine jewelry retailer should count all people passing a location.
a. true
b. false
Q21. Proper retail balance occurs when consumer demands for one-stop shopping are satisfied.
a. true
b. false
Q22. A major advantage of ownership versus leasing is _____.
a. no difficulty in lease renewals
b. lower capital requirements
c. the long-term commitment to a given location
d. the ability to purchase locations in major shopping centers
Q23. A string is composed of _____.
a. a supermarket or a variety store and convenience-oriented stores
b. at least one major department store and a broad group of specialty stores
c. at least one junior department store, a variety store, and service shops
d. stores with similar or compatible product lines
Q24. Small, independent retailers are generally best suited to isolated locations.
a. true
b. false
Q25. The secondary business district is a shopping area that has emerged to satisfy the convenience-shopping needs of a neighborhood.
a. true
b. false
Q26. In comparing the isolated store to the unplanned business district and planned shopping center, the major disadvantage of the isolated store is _____.
a. high rents
b. the absence of flexibility in store operations
c. the absence of affinities
d. lack of convenience in planning
Q27. The reporting relationships among employees within a retail firm are described by the _____.
a. job description
b. weighted application blank
c. goal-oriented job description
d. hierarchy of authority
Q28. Which selection technique results in a minimum total score becoming a cutoff point for hiring?
a. weighted application blank
b. application blank
c. goal-oriented job description
d. job analysis
Q29. A separate store organization should be utilized when _____.
a. branches are small and customer tastes are similar
b. branches are large and customer tastes vary by location
c. buying and selling functions need to be differentiated
d. stock needs to be transferred among branches
Q30. A tall organization is characterized by _____.
a. a short channel of communication
b. quick handling of problems
c. a large number of subordinates reporting to one supervisor
d. several management levels
Q31. In the separate store organization, each store has autonomy for merchandising and operations decisions.
a. true
b. false
Q32. The human resource environment facing retailers is characterized by _____.
a. inexperienced workers, long hours, and high variations in demand
b. low costs, short hours, and low variations in demand
c. highly visible workers, few part-time workers, and low variations in demand
d. less visible workers, few part-time workers, and low variations in demand
Q33. Retail training techniques such as role playing and behavior modeling are particularly well suited for sales training.
a. true
b. false
Q34. A major advantage of a flat organization is _____.
a. good communication among levels of supervision
b. a long channel of communication
c. the existence of several levels of supervision
d. fewer employees reporting to each manager
Q35. Delegation of a task involves the loss of some control by the retailer.
a. true
b. false
Q36. In the main store control organization, most authority remains with managers at the headquarters store.
a. true
b. false
Q37. Buyers are able to effectively control sales personnel in the Mazur plan since they are constantly on the selling floor.
a. true
b. false
Q38. The span of control refers to the number of subordinates reporting to one manager. A firm with a large span of control utilizes a _____ organization.
a. tall
b. flat
c. decentralized
d. functional
Q39. A retailer’s cash flow for a period corresponds to its sales revenue for the same period.
a. true
b. false
Q40. Leveraged buyouts are initially financed through the sale of common stock.
a. true
b. false
Q41. A retailer with a financial leverage ratio of 1 has _____.
a. no long-term debt
b. debt equal to current assets
c. debt equal to net worth
d. debt equal to fixed assets
Q42. Two measures of retailer liquidity are the quick ratio and assets to net sales.
a. true
b. false
Q43. The difference between net sales and cost of goods sold is gross profit.
a. true
b. false
Q44. Return on net worth equals return on assets times financial leverage.
a. true
b. false
Q45. The major difference between zero-based and incremental budgeting is the _____.
a. degree of employee participation
b. resulting budget amount obtained
c. absence or presence of opportunity costs in the budgetary process
d. starting point in the budget process
Q46. The difference between gross profit and total costs equals the _____.
a. cost of goods sold
b. net profit after taxes
c. cost of goods available for sales
d. net profit before taxes
Q47. Staying open longer hours, increasing the use of mail and phone orders, and purchasing goods through vendors with faster delivery times allows a retailer to _____.
a. increase its return on assets
b. increase its profit margins
c. increase its financial leverage
d. decrease its return on assets
Q48. The quick ratio measures a retailer’s ability to _____.
a. raise capital with a stock offering
b. earn a satisfactory profit
c. cover short-term liabilities
d. turn inventory at satisfactory levels
Q49. A firm has accounts receivable of $400,000 and net sales of $365,000. Its collection period is 111 days.
a. true
b. false
Q50. Which budgeting process uses important aspects of a participative management style?
a. incremental budgeting
b. zero-based budgeting
c. top-down budgeting
d. bottom-up budgeting
