Fundamentals & Core Concepts Flashcards
7 cards from real CRA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Fundamentals & Core Concepts flashcards as text
Which forecasting method applies different weights to recent vs. older historical sales data, giving more importance to recent observations?
Answer: Weighted moving average
A weighted moving average assigns higher weights to more recent periods, making it more responsive to recent demand trends than a simple moving average.
A retailer's 'open-to-buy' (OTB) budget is best described as:
Answer: The planned purchase dollars available to a buyer for a given period after accounting for existing commitments
Open-to-buy is the dollar or unit amount a buyer is authorized to purchase in a given period, calculated as planned purchases minus commitments already made.
The 'long tail' concept in retail assortment planning suggests that:
Answer: A large number of niche products can collectively rival the sales of bestsellers
The long tail theory holds that, especially in e-commerce, many low-volume niche items can collectively generate significant revenue comparable to top sellers.
Which retail analytics concept segments customers based on their Recency, Frequency, and Monetary value?
Answer: RFM analysis
RFM (Recency, Frequency, Monetary) analysis ranks customers by how recently they purchased, how often they purchase, and how much they spend.
In retail supply chain terms, 'lead time' refers to:
Answer: The time between placing an order and receiving the merchandise
Lead time is the elapsed time from when a purchase order is placed to when the goods are received and available for sale.
A retailer operating with an 'everyday low price' (EDLP) strategy primarily benefits from:
Answer: Reducing operational complexity and building customer trust through price consistency
EDLP simplifies operations by eliminating frequent promotions, reducing inventory volatility, and building customer loyalty through predictable, stable pricing.
Which of the following best defines 'vendor managed inventory' (VMI)?
Answer: The vendor monitors the retailer's inventory levels and takes responsibility for replenishment decisions
In VMI, the vendor is given visibility into the retailer's inventory data and takes ownership of the replenishment decisions to optimize supply.