Retail Operations Flashcards

A retailer notices that a best-selling product has a 90-day supply on hand. What should the buyer do first?

Answer: Reduce reorder frequency to avoid overstocking

With 90 days of supply on hand, the buyer should reduce reorder frequency to prevent further overstocking and tied-up capital.

Which shrinkage category typically accounts for the largest share of retail losses?

Answer: Employee theft

Employee theft consistently accounts for the largest share of retail shrinkage, often exceeding shoplifting losses.

A store's sell-through rate for a seasonal item is 40% after four weeks. What action is most appropriate?

Answer: Implement a markdown to improve sell-through

A 40% sell-through rate after four weeks is below target, so a markdown is used to stimulate demand and reduce end-of-season leftover.

What does the term 'planogram' refer to in retail operations?

Answer: A visual diagram specifying product placement on shelves

A planogram is a visual schematic that dictates exactly how and where products should be displayed on retail shelving.

Which metric best measures how efficiently a retailer is using its selling floor space?

Answer: Sales per square foot

Sales per square foot directly measures the revenue generated for every square foot of selling space, making it the standard space productivity metric.

A retailer receives a shipment with 5% of units damaged. Under standard vendor agreements, what is the correct first step?

Answer: Document the damage and file a claim with the vendor

The correct procedure is to document the damage thoroughly and file a formal claim with the vendor to recover costs under the vendor agreement.

What is the primary purpose of cycle counting in a retail store?

Answer: To verify inventory accuracy on a rotating basis without full shutdowns

Cycle counting audits a subset of inventory on a rotating schedule, maintaining ongoing accuracy without requiring a full store closure.