CRT Retail Operations & Inventory Management Flashcards

What is 'shrinkage' in retail inventory management?

Answer: The difference between recorded inventory and actual physical inventory

Shrinkage is inventory loss resulting from theft, employee theft, vendor fraud, administrative errors, or product damage that creates a gap between book inventory and physical count.

What does SKU stand for in retail operations?

Answer: Stock Keeping Unit

A SKU (Stock Keeping Unit) is a unique identifier assigned to each distinct product or variant, used to track inventory levels and sales data accurately.

What is 'open-to-buy' budgeting in retail?

Answer: A planned purchasing budget that limits how much inventory can be ordered in a period

Open-to-buy is a purchasing budget system that calculates allowable order amounts based on planned sales, current inventory levels, and desired ending inventory targets.

What is the primary purpose of a point-of-sale (POS) system in a tobacco retail store?

Answer: To process transactions, track inventory, and generate sales reports

A modern POS system integrates transaction processing, real-time inventory tracking, sales reporting, customer data management, and compliance tools into a single unified platform.

When a customer requests a specific cigar brand that is out of stock, what is the best retail response?

Answer: Note the request, offer a similar alternative, and follow up when restocked

Noting the request, offering comparable alternatives, and following up when stock arrives demonstrates exceptional service and maximizes the chance of retaining the customer.

What is vendor-managed inventory (VMI) in tobacco retail?

Answer: When the supplier monitors and replenishes stock levels directly

In VMI, the supplier takes responsibility for monitoring stock levels and initiating replenishment orders, reducing the retailer's administrative burden and often improving inventory efficiency.