Inventory and Retail Strategy Flashcards

A spa's carrying costs are rising. Which factor is NOT typically part of inventory carrying cost?

Answer: Client tipping rates

Client tips are unrelated to the cost of holding inventory.

What does a high inventory-to-sales ratio usually indicate?

Answer: Overstocking relative to demand

A high ratio signals too much stock compared to how much sells.

Which strategy best protects margins when a distributor raises wholesale prices?

Answer: Adjust retail prices or negotiate volume terms

Repricing or negotiating keeps margins healthy after cost increases.

A salon wants to reward repeat retail buyers. Which program fits best?

Answer: A points-based loyalty program

Loyalty points encourage clients to keep buying retail over time.

What is the purpose of a 'planogram' in retail merchandising?

Answer: A visual diagram for optimal product placement

A planogram maps where products go on shelves to maximize sales.

A retailer sells online and in-salon. What is a key benefit of unified inventory across both?

Answer: Prevents overselling and shows accurate stock everywhere

Unified inventory keeps stock counts accurate across all channels.

Which financial report best shows whether the retail side of a salon is profitable?

Answer: Retail profit and loss statement

A retail P&L reveals revenue minus costs for the product side.