Questions and Answers of Retail Management

Next time you walk through a store, identify some places or areas that may benefit from situational crime prevention.
What are some of your “hot” products? Do they align with the CRAVED framework?
How does time and space play a role in loss prevention in your industry?
Provide an example of the SARA model in your line of work. Make sure to define how the problem was discovered and analyzed, how you or your team responded to the problem, and how the method’s
Who are shoplifters? What is a common way to classify shoplifters?
What is organized retail crime? What is a critical element needed to identify these crime rings?
Describe the roles of a booster, a handler, and a fence.
What are the sources of retail loss? What is the leading source of retail loss?
What are some of the ways employees commit theft? How might you mitigate some of these methods?
Name some of the return fraud types. How are they committed?
Imagine you are given the task of assessing the magnitude of employee theft at your company. You have 500 stores, so you take a random sample to generalize the results. You take a random sample of 30
If 80 employees take an exam, how many will score within two standard deviations of the mean? How many employees will score more than two standard deviations from the mean?
When should you consider reporting the median instead of the mean?
Why is data standardization important? How is it useful?
What are some methods of transforming numeric variables? Why might you choose to transform a numeric variable?
Use the sample data from Table 5.1 to create a bar chart that summarizes the number of stolen products by month. Create a bar chart that summarizes the number of stolen products by loss prevention
Use the sample data from Table 5.1 to create a frequency chart that illustrates the percentage of sales accounted for by month. Create the chart in Excel and SPSS.Table 5.1 Store 1 1 1 1 1 1 1 1 1 1
Use the sample data from Table 5.1 to create a line chart showing the sum of stolen products by month for each of the stores.Table 5.1 Store 1 1 1 1 1 1 1 1 1 1 1 1 2 2 N N N 2 2 Sales 25,000 27,654
When should you use a control chart?
What is inferential statistics? How is it related to the concept of a population and a sample?
Why is sampling important?
What is a parameter? What is a statistic? How are the two concepts different?
What happens to the margin of error as the sample size increases? Why?
What is a confidence interval? What does it mean to have a 95% confidence interval?
a. Write the 95% confidence interval, assuming the following values (assume normal distribution: z score):• Sample size of 100;• Sample mean of 25;• Standard deviation of 7.b. Write the 95%
You think the age of the cashier is related to employee theft. Write null and alternative hypotheses to reflect your test.
What is a p value? What is the common p value where the researcher rejects the null hypothesis?
What is Type I error? What is Type II error? How are they related?
Conduct a two-sample t test on the data (assume equal variances):a. Write the null and alternative hypotheses.b. What is the mean shrink for Store 1? For Store 2?c. What is the two-tailed p value?d.
Conduct a two-sample t test on the data, but assume unequal variances. How did the results change? Why?The dataset given in Table 7.8 shows the monthly shrink rates in stores 1 and 2. Use this
Conduct a paired t test using the data:a. Write the null and alternative hypotheses.b. What is the two-tailed p value?c. Can you reject the null hypothesis?The dataset given in Table 7.8 shows the
Name four threats to validity.
What are confounding variables? How do they influence the experiment? What can you do to remove the impact of confounding variables?
Why is sample size important in an experiment?
What are the steps of an experiment?
What is randomization? How is it important in testing? What does it help mitigate?
Why should an experiment use a control sample?
What is a model? What are the two components?
What is the difference between predictive and inferential models?
How can you reduce the chance of overfitting the model? What does it mean to cross-validate the model?
What is the difference between accuracy and precision?
What are the steps in the predictive modeling lifecycle?
What are some methods to check model fit?
What are some methods to check model performance?
What is linear regression? What kind of variable are you trying to predict?
In a simple linear regression (one X variable and one Y variable), what does the coefficient represent?
Assume that you have the output shown in Figure 10.31 for a regression model:a. Which variables are significant?b. How do you interpret the coefficient for Var1?c. Predict the value of Y, when Var1 =
Name some of the variable selection options available when building a regression model.
What is the difference between R2 and adjusted R2? Which should you use if you have many independent variables in your model?
What type of response variable is being predicted with a logistic regression model?
Assume the following data:• Group 1 has a 5% chance of winning.• Group 2 has a 8% change of winning.a. Calculate the odds of winning for Group 1 and Group 2.b. Calculate the odds ratio of Group 1
You have obtained the output shown in Figure 11.13 from a logistic regression model:a. Which variables are significant?b. How would you interpret the “Age” coefficient?c. How would you interpret
What are sensitivity and specificity?
What is a receiver operating characteristics curve? How is it used?
What is a Kolmogorov–Smirnoff statistic? How is it used?
List some of the pros associated with more complex models, such as neural network models.
List some of the cons associated with more complex models, such as neural network models.
What are classification and regression trees? How are they different from each other?
How can you ensure that your model is not fitting “noise”?
When should you consider fitting these advanced models instead of the more traditional model options (for example, regression)?
Who are the key team members to include in your analytics team?
Which analytics software package might you select for your organization? Why?
How can you assess whether your analytical infrastructure is nearing capacity?
A retailer has net sales of $1,000,000, net profit of $185,000, total assets of $600,000, and a net worth of $225,000.a. Calculate asset turnover, profit margin, and return on assets.b. Compute
Why does the concept of ease of entry usually have less impact on chain retailers than on independent retailers?
Cities A and B are 50 miles apart. City A has a population of 400,000 and City B has a population of 100,000. According to Reilly's law, what is the point of indifference for City B?a. 3.3 milesb.
If City B, from the prior problem, has a population increase of 20 percent over the next three years while City A has an increase of 10 percent, what will the point of indifference be for City B?a.
Respectively, Cities A, B, and C have 5,000, 10,000, and 12,500 square feet of retail selling space allocated to gift items. Potential customers live 7 minutes from City A, 10 minutes from City B,
If the effect of travel time in the prior problem is really 2, what percentage of customers will shop in City A for gift items?a. 18b. 28.7c. 34d. 44
A community has 50,000 residents; 35,000 of them regularly shop in that community. These shoppers spend an average of $225 per week in the community. What are the expected annual sales in the
If the percentage of residents in problem 5 who shop in their community goes to 90 percent and the average expenditures stay constant at $225 per week, by what percentage will expected annual sales
In comparison to several trading areas with similar demographics, Area A has a high number of persons per retail establishment, high average sales per employee, and high average sales per square foot
A retailer uses a perpetual inventory system. Compute the firm's end-of-month inventory at cost, if monthly sales (at cost) = $600,000; monthly sales (at retail) = $750,000; monthly purchases (at
Compute the cost of goods sold, if sales = $1,000,000; beginning inventory (at cost) = $700,000; ending inventory (at cost) = $150,000; purchases (at cost) = $200,000.a. $50,000b. $250,000c.
What is the cost complement for Adams Stationery?Calculation of Merchandise Available for Sale:Cost Method – Beginning inventory = $75,000; Net purchases = $60,000; Transportation = $1,500; Total
A physical inventory of the merchandise of Adams Stationery as of December 31, 2016, showed a valuation of $160,000 (at retail). Compute the stock shortages that occurred during the period from
Calculate the ending inventory at cost for Adams Stationery as of December 31, 2016.a. $45,600b. $60,800c. $76,300d. $82,400
A toy store has average monthly sales of $80,000. Its sales for December were $120,000. What is the monthly sales index for December?a. 153b. 67c. 150d. 400
A firm plans its average monthly stock at retail to be $34,000 and its average monthly sales to be $22,000. What is its basic stock at retail?a. $4,000b. $7,000c. $12,000d. $34,000
A camera retailer uses the weeks' supply method of inventory planning. If average weekly sales are $5,000, and a three-week supply of merchandise is desired, what is the planned inventory level?a.
A small appliance dealer estimates May sales to be $350,000 and plans reductions to be 20 percent of sales and ending inventory to be $65,000. Beginning inventory is $85,000. Compute planned
A health food retailer has $120,000 in monthly operating expenses and planned monthly sales of $400,000. Reductions are planned to be $10,000. A profit goal of $40,000 is established. What is the
A mail-order retailer has an average inventory at retail of $300,000 and net annual sales of $5,000,000. What is the annual stock turnover rate at retail?a. 7.5 xb. 15.0 xc. 16.7 xd. 17.0 x
A clothing store has a gross margin of $35,000 and net sales of $100,000. What is the gross margin percentage?a. 15%b. 25%c. 35%d. 80%
A computer retailer has net annual sales of $150,000 and average inventory at cost is $35,000. What is the annual sales-to-stock measure?a. 4.3 xb. 6.0 xc. 7.5 xd. 8.0 x
A beauty supply retailer wants to receive a 35 percent markup (at retail) for all merchandise. If a magnifying mirror retails for $11 per tile, what is the maximum that the retailer would be willing
A retailer can sell 100 printers per month at a price of $200 each or 275 printers per month at a price of $175 each. What is the elasticity of demand (expressed as a positive number)?a. 0.40b.
If the retailer in problem 1 can sell 400 printers at $155, what is the price elasticity of demand (expressed as a positive number) between the prices of $175 and $155?a. 0.48b. 1.83c. 2.44d.
A men’s specialty shop uses a markup of 40 percent at retail for branded shirts. What is the markup equivalent at cost?a. 45%b. 66.7%c. 100%d. 122%
A ladies’ specialty shop buys merchandise for $20 and sells it for $35. What is the markup at retail?a. 42.8%b. 57.4%c. 100%d. 150%
A bookstore buys books for $70 and sells them for $100. What is the markup at retail?a. 30%b. 80%c. 140%d. 220%
A retailer purchases appliances for $10 and desires a 40 percent markup at retail. What should the retail price be?a. $11.70b. $13.00c. $14.28d. $16.67
A retailer purchases milk for $1.50 per quart and seeks a 30 percent markup at retail. What should the retail price be?a. $1.30b. $1.43c. $1.65d. $2.14
A belt shop requires a minimum markup of 40 percent at retail on leather belts. If the store owner feels that a line of leather belts should retail for $50.00 each, what is the maximum price he or
The belt retailer noted in problem 8 sells plastic belts for $10 and seeks a 25 percent markup at retail. What is the maximum price he or she will pay per belt?a. $5.00b. $6.00c. $7.50d. $9.00
A retailer has purchased a line of sports jackets for $125 each. The selling price is $200 per jacket. What is the markup at retail?a. 37.5%b. 42.0%c. 53.0%d. 63.0%
A retailer has purchased a line of suits for $200 each. The selling price is $375 per suit. What is the markup at retail?a. 46.7%b. 57.1%c. 75.0%d. 175.0%
A retailer has net annual sales of $300,000. Retail expenses are $75,000. Net profit is $25,000. Compute the maintained markup at retail.a. 20%b. 33.3%c. 44.4%d. 80%
A retailer has net annual sales of $3,000,000. Retail expenses are $260,000. Net profit is $400,000. Calculate the maintained markup at retail.a. 13.0%b. 16.5%c. 20.0%d. 22.0%
For the retailer in problem 13, the retail selling price is $10.00. What are the merchandise costs?a. $3.33b. $6.67c. $12.00d. $14.92Data from problem 13A retailer has net annual sales of $3,000,000.

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