Retail Industry Foundations Flashcards
7 cards from real CRA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Retail Industry Foundations flashcards as text
Which economic concept explains why retail stores cluster together in the same location even though they sell competing products?
Answer: Principle of minimum differentiation (Hotelling's Law)
Hotelling's Law explains that competing retailers benefit from co-location because it maximizes their combined market reach and customer comparison shopping.
The Americans with Disabilities Act (ADA) most directly affects retail store design by requiring:
Answer: Accessible pathways, entrances, and service counters for customers with disabilities
ADA mandates that retail stores provide accessible facilities including ramps, wide aisles, and accessible checkout counters for customers with physical disabilities.
In retail, 'slotting fees' are payments made by:
Answer: Vendors to retailers in exchange for shelf space placement
Slotting fees (also called slotting allowances) are upfront payments manufacturers pay to secure shelf space for new products in retail stores.
Which of the following retail KPIs is calculated as gross margin dollars divided by average inventory cost?
Answer: Gross margin return on investment (GMROI)
GMROI measures how many dollars of gross margin a retailer earns for every dollar invested in inventory, linking profitability with inventory efficiency.
The Federal Trade Commission's (FTC) 'Made in USA' standard requires that a product marketed as American-made must be:
Answer: All or virtually all made in the United States
The FTC requires 'all or virtually all' significant parts and processing to originate in the US for an unqualified 'Made in USA' claim.
Which of the following describes 'just-in-time' (JIT) inventory management in a retail context?
Answer: Receiving merchandise as close as possible to the time it is needed on the selling floor
JIT minimizes on-hand inventory by synchronizing replenishment orders tightly with actual sales velocity, reducing carrying costs and obsolescence risk.
Which retail metric is calculated as the number of units sold divided by the number of units available for sale, expressed as a percentage?
Answer: Sell-through rate
Sell-through rate measures the percentage of received inventory that has been sold within a given period, indicating how well merchandise is moving.