CRT Retail Operations & Inventory Management Flashcards

What does FIFO stand for in retail inventory management?

Answer: First In, First Out

FIFO (First In, First Out) means selling older stock before newer stock to maintain product freshness and prevent spoilage or aging issues.

When conducting a physical inventory count, what is the primary reason for comparing physical counts to system records?

Answer: To identify shrinkage, theft, and data entry errors

Comparing physical counts to system records identifies discrepancies caused by theft, spoilage, miscounts, or data entry errors — all forms of shrinkage that reduce profitability.

What is a planogram in retail operations?

Answer: A visual diagram showing where products should be placed on shelves

A planogram is a visual merchandising tool that specifies exactly where each product should be placed on shelves to maximize sales and create an organized shopping experience.

What is the purpose of a reorder point (minimum stock level) in inventory management?

Answer: To trigger a purchase order before stock runs out

A reorder point is the minimum stock level that triggers a new order, ensuring product availability without running out during supplier lead time.

In tobacco retail, what is the term for premium cigars sold individually rather than in full boxes?

Answer: Singles

Singles are individually sold cigars that allow customers to sample different brands without purchasing a full box, typically offering higher per-unit profit margins for the retailer.

What is the gross margin formula used in retail pricing?

Answer: (Selling Price − Cost of Goods) ÷ Selling Price × 100

Gross margin percentage is calculated as (Selling Price minus Cost of Goods Sold) divided by Selling Price, multiplied by 100 — always based on selling price, not cost.