DECA Retail Operations 3

Question 1

A fashion retailer receives merchandise in March for a summer selling season. This is an example of what buying strategy?

Accepted Answer

Forward buying

Answer

Forward buying involves purchasing merchandise well in advance of when it will be sold, which is standard practice in fashion retail.

Question 2

Which of the following is a variable cost for a retail store?

Accepted Answer

Cost of goods sold

Answer

Cost of goods sold varies directly with sales volume, making it a variable cost, unlike fixed costs such as rent or salaries.

Question 3

A store achieves a 55% gross margin on a product priced at $40. What was the cost of the item?

Accepted Answer

$18.00

Answer

Gross margin of 55% means cost is 45% of retail: $40 × 0.45 = $18.00.

Question 4

What is the purpose of a loss leader pricing strategy in retail?

Accepted Answer

To price one item below cost to attract customers who will buy other products

Answer

A loss leader is priced below cost intentionally to draw traffic, with the expectation that customers will purchase additional full-margin items.

Question 5

Which component of the retail marketing mix is most directly controlled by store-level operations staff?

Accepted Answer

In-store customer service

Answer

In-store customer service is directly managed and delivered by store-level staff, making it the most operationally controllable marketing mix element.

(DECA) Distributive Education Clubs of America Practice Test

(DECA) Distributive Education Clubs of America Practice Test

DECA Retail Operations 3