CRT CRT Retail Operations & Inventory Management 2 — Questions and Answers
Question 1: What is 'shrinkage' in retail inventory management?
- The difference between recorded inventory and actual physical inventory (Correct answer)
- The reduction in cigar size during the drying process
- Price markdowns applied to slow-moving products
- Natural evaporation of humidifier solution over time
Correct 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.
Question 2: What does SKU stand for in retail operations?
- Stock Keeping Unit (Correct answer)
- Sales Key Utility
- Stock Key Update
- Standard Keeping Unit
Correct 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.
Question 3: What is 'open-to-buy' budgeting in retail?
- A planned purchasing budget that limits how much inventory can be ordered in a period (Correct answer)
- A promotional strategy offering storewide discounts
- A store policy allowing returns without a receipt
- A featured product display area near the entrance
Correct 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.
Question 4: What is the primary purpose of a point-of-sale (POS) system in a tobacco retail store?
- To process transactions, track inventory, and generate sales reports (Correct answer)
- Exclusively to process credit and debit card payments
- To manage employee schedules only
- To communicate purchase orders to wholesalers only
Correct 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.
Question 5: When a customer requests a specific cigar brand that is out of stock, what is the best retail response?
- Note the request, offer a similar alternative, and follow up when restocked (Correct answer)
- Tell the customer to check back at an unspecified later date
- Suggest the customer purchase it online from a competitor
- Simply apologize and end the conversation
Correct 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.
Question 6: What is vendor-managed inventory (VMI) in tobacco retail?
- When the supplier monitors and replenishes stock levels directly (Correct answer)
- When retailers manage all vendor relationships exclusively
- A system where store employees set all purchase orders independently
- A government program for tracking tobacco product sales
Correct 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.
CRT CRT Retail Operations & Inventory Management 2
What is 'shrinkage' in retail inventory management?