DECA Retail Operations 2 — Questions and Answers
Question 1: A retailer notices that a best-selling product has a 90-day supply on hand. What should the buyer do first?
- Reorder immediately at double quantity
- Reduce reorder frequency to avoid overstocking (Correct answer)
- Mark the item down to accelerate sell-through
- Transfer excess stock to another location
Correct 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.
Question 2: Which shrinkage category typically accounts for the largest share of retail losses?
- Vendor fraud
- Employee theft (Correct answer)
- Shoplifting
- Administrative errors
Correct answer: Employee theft
Employee theft consistently accounts for the largest share of retail shrinkage, often exceeding shoplifting losses.
Question 3: A store's sell-through rate for a seasonal item is 40% after four weeks. What action is most appropriate?
- Increase the retail price to maximize margin
- Reorder aggressively before the season ends
- Implement a markdown to improve sell-through (Correct answer)
- Move the item to a less visible location
Correct 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.
Question 4: What does the term 'planogram' refer to in retail operations?
- A financial plan showing projected store revenue
- A visual diagram specifying product placement on shelves (Correct answer)
- A staffing schedule for peak shopping periods
- A chart mapping delivery routes for merchandise
Correct 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.
Question 5: Which metric best measures how efficiently a retailer is using its selling floor space?
- Gross margin return on investment (GMROI)
- Sales per square foot (Correct answer)
- Average transaction value
- Customer conversion rate
Correct 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.
Question 6: A retailer receives a shipment with 5% of units damaged. Under standard vendor agreements, what is the correct first step?
- Accept the shipment and request a future credit
- Refuse the entire shipment and return it to the vendor
- Document the damage and file a claim with the vendor (Correct answer)
- Sell the damaged units at full price and absorb the loss
Correct 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.
Question 7: What is the primary purpose of cycle counting in a retail store?
- To calculate end-of-year profit and loss
- To verify inventory accuracy on a rotating basis without full shutdowns (Correct answer)
- To schedule employee work cycles across departments
- To track customer purchase cycles over time
Correct 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.
DECA Retail Operations 2
A retailer notices that a best-selling product has a 90-day supply on hand.
What should the buyer do first?