SIKKIM MANIPAL UNIVERSITY - DDE

Bachelor of Business Administration – BBA Semester VI

BBR603 – Merchandising and Supply Chain Management – 4 Credits
(Book ID: B1942)
Model Question Paper–Key Answers
Duration: 3 hours Total marks: 140

Section A
ESSAY TYPE QUESTIONS (10 marks each)
[Please answer Any Four essay type questions in a separate page answer sheet especially
provided for the purpose] (10 x 4 = 40 marks)
1. A. Explain supply chain collaboration briefly. (2 marks)
B. Write about any four types of supply chain collaboration strategies adopted by various
organisations (2 x 4 = 8 marks)
2. A. What are the four stages of retailer-supplier relationship development. ( 1 x 4 = 4 marks)
B. Describe any four factors affecting retailer-supplier relationship. (1.5 x 4 = 6 marks)
3. A. Write about merchandise planning in any two types of stores. (2 x 2 = 4 marks)
B. Describe implications of merchandise planning on any four departments in an organisation.
(1.5 x 4 = 6 marks)
4. A. Mention any four points a retailer should consider while sourcing from the international
market? (2 x 4 = 8 marks)
B. Describe briefly any two types of retail exchanges? (2 marks)
5. A. Write any seven competitive benefits of using the ERP system in the modern day retail. (1 x 7
= 7 marks)
B. Write a short note on RFID as an information technology tool in retailing. (3 marks)
Case Study: Atmospherics at Max Retail Stores
Max is a leading retail store in the Middle East that offers fashion clothing, footwear, accessories and
household products to its customers. The first Max store was opened in May 2004 in UAE. Today,
more than 100 Max stores have been opened across the world. The store offers a wide range of
assortments, and the area it covers is between 18,000 and 30,000 square feet. The store becomes
crowded during the weekend.
The lighting and colour scheme of Max stores are impressive. The colour scheme at a max store is a
combination of cool and warm colours, which is also shown in its logo (blue coloured letters “M” and
“a” with red coloured letter “x”). The interior of a Max store is also filled with red and blue shades up to
a reasonable extent. The colour of the merchandise background is not kept blue or red as these
colours affect the colour of the merchandise displayed at the store. In most Max stores, a light colour
background is used to the majority of the merchandise. However, the separation and emphasis are
done with the help of red and blue colour pillars and corners.

The lighting inside the stores is done with primary lighting using small CFL bulbs. However, yellow
and red colour lights are also used at some places like for showcases and signboards. The lighting in
the stores is direct from the ceiling, so that it does not create an unpleasing shadow. In the daylight,
the bright coloured logo shines at the outer space of the store, and during the night, it is lighten up to
catch shoppers’ attention.
A pleasing music is played for the customers inside the store. The temperature at the store is also
maintained between 22 and 24 degree Celsius to give the customers comfort while shopping. The
cash counters are located at such places inside the store that make it easy for the customers to
access them.
Questions:
1. What lighting and colour scheme are adopted by Max stores? (5 marks)
2. What are the pleasing elements in the complete atmosphere of a max store? (5 marks)

Section B
Multiple-Choice Questions (MCQ)
[Please answer all the following questions]
Answer the following one mark questions from 1 to 50: (1 x 50 = 50 marks)
1. According to Kotler, “A retailer or retail store is any business enterprise whose ............... comes
primarily from retailing.”
a. Sales volume
b. Gross profit
4. c. Return on investment
d. Inbound logistics
2. China opened up its economy to the world in ............, which led to the growth of the retail market
in the country.
a. 1960s
b. 1970s
c. 1980s
d. 1990s
3. Trumart, Nilgiris, Food World, Reliance Fresh and Spencers Daily belong to .............. .
a. Departmental stores
b. Consumer durable chains
c. Specialty stores
d. Convenience stores
4. Certain brands like Reebok, Benetton and Dollar Store have .............. to attract customers by
providing heavy discounts.
a. Supermarkets
b. Factory outlets
c. Discount stores
d. General merchandise stores
5. The process of trading off variety, assortment and stock is called .............. .
a. Variety planning
b. Operational strategy
c. Stock planning
d. Assortment planning
6. It is difficult to reverse the ..............., as it would incur heavy costs to the organisation.
a. Execution decisions
b. Strategic decisions
c. Tactical decisions
d. Operational decisions
7. The manufacturing supply chains are ........... focussed.
a. Inventory
b. Asset
c. Distribution
d. Locations
8. ............... provides a competitive advantage to an organisation, as it can perform the function
more effectively as compared to other functions.
a. Non-Core competency
b. Extreme outsourcing
c. Collaboration of supply chains
d. Core competency
9. Operational product management doesn't include:
a. Sales forecasting
b. Space allocation
c. Visual merchandising
d. Category management
10. .............. is the second largest segment of Indian retailing.
 a. Consumer electronics
b. Apparel and footwear
c. Food and grocery
d. Home furnishing
11. One of the common ways for performing direct selling is ............. .
a. Television shopping
b. Party plan
c. Catalogue retailing
d. Electronic shopping
12. If a retail store offers shampoos, oils, conditioners and other hair care products, it maintains a
good product ............ in its merchandise lines.
a. Length
b. Width
c. Depth
d. Consistency
13. Which of the following is a category assortment objective?
a. Maintain exclusivity
b. Meet the profitability targets
c. Drive walk-ins
d. Attain return on asset target
14. Which of the following is not a step involved in the assortment selection?
a. Assortment finalisation
b. SKU deletion
c. Assortment qualifications
d. Market coverage
15. A colour wheel is a convenience tool that helps to determine the colour scheme of a store. It is a
usual wheel filled with .............. different colours.
a. 8
b. 10
c. 12
d. 15
16. .............. lighting does not focus on merchandise, but fulfils the need of store illumination.
a. Primary
b. Accent
c. Secondary
 d. Atmosphere

17. Fixed cycle replenishment has:

a. Unpredictable demand and sales pattern
b. High transportation costs
c. Production in large batch sizes
d. Low inventory carrying costs
18. .............. is defined as the process of planning the merchandise mix for a retail organisation.
a. Merchandise budget
b. Merchandise mix
c. Merchandise assortment
d. Merchandise hierarchy
19. Which of the following is not an enabling component of category management?
a. Communication and connectivity
b. Performance measurements
c. Organisation capability
d. Trading partner relationships
20. Product management within the outlet includes .............. .
a. Supply chain management
b. Store profiling
c. Visual merchandising
d. Display merchandise
21. If a retail store offers frames, lamps, wall hangings and flower vase in the merchandise line of
home décor, the Product ............ of store would be counted as four.
a. Consistency
b. Depth
c. Length
d. Width
22. Time series model of merchandise forecasting is:
a. Linear regression
b. Econometric modelling
c. Multiple regression
d. Robust regression
23. Which of the following information is not contained by merchandise packaging barcode:
a. Division of merchandise
b. Location
c. Stock transfer order
d. Quantity in cartons
24. In ..............., merchandisers set SKU level stock norm for every store they handle.
a. Auto Replenishment System (ARS)
b. Collaborative Planning Forecasting and Replenishment (CPFR)
c. Vendor Managed Inventory (VMI)
d. Retailer Driven Replenishment (RDR)
25. Retail replenishment helps the retailers, except:
a. Providing time to analyse new opportunities
b. Reducing inventory levels
c. Ensuring markdown at the store
d. Reducing inventory cost
26. Which of the following is not used by the retailers to measure the efficiency of its distribution and
replenishment on time?
a. Inventory turn at distribution centre
b. Planning and ordering cost
c. Stock out levels at retail store
d. Product quality levels
27. ............. helps in settling supplier payments electronically.
a. Brand Architecture
b. Evaluated Receipt Settlement (ERS)
c. POS System
d. Electronic Data Interchange (EDI)
28. Most items manufactured for sale through the retail stores bear a number and a ............. .
a. Company code
b. Barcode
c. EAN prefix
d. Product code
29. An example of casual model of merchandise forecasting is:
 a. Theory of Constraints
b. Winter’s method
c. Holt’s method
d. Exponential smoothing
30. ................ colour scheme is vibrant and gets a muted and traditional view of a store.
a. Analogous
b. Triadic
c. Complementary
d. Split complementary
31. In .............., suppliers are responsible for the management of stock on the retail store shelf.
a. Computer Based Ordering
b. Collaborative Planning Forecasting and Replenishment
c. Vendor Managed Inventory
d. Retailer Driven Replenishment
32. Which of the following ERP packages is expensive to acquire?
a. SAP
b. Aldata
c. Oracle
d. Sage pro
33. ............. ERP requires minimum hardware resources.
a. Oracle
b. Sage pro
c. Microsoft Dynamics NAV
d. SAP
34. IT enables the CRM software to perform the following functions. Choose the incorrect one:
a. Gathering competitor and customer information
b. Making ordering and billing process easy
c. Personalising Web interface
d. Preparing customer loyalty programme
35. The US retail market is classified into three categories: department stores, mass merchandisers
and ............. .
a. Convenience stores
b. Hypermarkets
c. Specialty stores
 d. Discount stores

36. The average size of each retail outlet in India is ............. square feet.
a. 50-100
b. 100- 150
c. 150- 200
d. 200- 250
37. Indian retail industry is expected to grow at a rate of .............. annually, and will reach US$175–
200 billion by 2016.
a. 10%
b. 15%
c. 25%
d. 50%
38. Which of the following is not a cause of retail industry growth in India?
a. Joint families in urban areas
b. Young working population with the average age of 24 years
c. Population of working women
d. New opportunities in services sector
39. Concept, living room, style spa and tangent are examples of ................ .
a. Convenience stores
b. Furniture retailing
c. Consumer durable chains
d. Specialty stores
40. ................ are departmentalised volume retailers, like Cantabil and Loot.
a. Discount stores
b. Factory outlets
c. Supermarkets
d. General merchandise stores
41. The success or failure of a retail supply chain depends on ................ .
a. Handle multichannel marketing
b. Stock-outs
c. Small store shelf life
d. Handle mass customisation
42. .............. refer to the decisions taken on regular basis, like, where to unload the stock and where
to display the promotional products.
a. Strategic decisions
b. Tactical decisions
c. Operational decisions
d. Execution decisions
43. Earlier, the ownership of inventory management was divided among different departments based
on the type of inventory. For example, raw material inventory was managed by the .................
department.
a. Distribution
b. Marketing
c. Procurement
d. Production
44. Coupons, samples, premiums, point-of-purchase (POP) displays, contests, rebates and
sweepstakes are examples of ............. .
a. Personal selling
b. Sales promotion
c. Advertising
d. Direct marketing
45. There is no alteration made in the intensity, brightness or shades of the colours in the ................
scheme.
a. Split complementary
b. Double complementary
c. Tone on tone
d. Analogous scheme
46. The ............. ERP is demanding in terms of hardware resources requirements.
a. Sage pro
b. Oracle
c. SAP
d. Microsoft Dynamics NAV
47. Oracle provides the Oracle ............ for the retail sector.
a. Retail Information Management
b. Retail Information System
 c. Retail Management System
d. Retail Merchandising System
48. The .............. is critical to make the retail ERP systems popular with the non-technical users.
a. Extranet
b. Universal standard
c. Networking feature
d. Graphical user interface
49. An ERP retail system must have the following components to capture and provide the relevant
information to the retailer, except:
a. Inventory management
b. Universal standard
c. Reports
d. Inventory optimisation
50. RFID scans a .............. tag using radio frequency.
a. Transistor
b. Magnetic
c. Semiconductor
d. Electronic
Answer the following two marks questions from 51 to 75 (2 x 25 = 50 marks)
51. The contemporary retail came into existence in three successive phases:
I The first phase took place in early to mid-1990s in Mexico, Central America, South-east
Asia and South Central Europe.
II. In the second phase of retail industry evolution, the concept of organised retail came into
existence in mid-to-late 1990s in South America, East Asia excluding China, North Central
Europe, and South Africa.
State True or False:
a. 1- False, 2- False
b. 1- False, 2- True
c. 1- True, 2- True
d. 1- True, 2- False
52. In a retail store, strategic product management includes:
1. Preparation of plan for integrated information system and supply chain management
2. Distribution of resources and space allocation
State True or False:
a. 1- False, 2- False
b. 1- False, 2- True
c. 1- True, 2- True
d. 1- True, 2- False
53. Retailing refers to the activity of buying products or services at/in ............ and selling them at/in
.............. .
a. Assortment, no assortment
b. Large quantities, small quantities
c. Large varieties, small varieties
d. Low cost , high cost
54. Consider the following statements about private labels:
1. It involves high cost incurred on various processes of product development, including
research and development.
2. It leads to global sourcing issues, including visibility, import documentation and compliance
issues.
State True or False:
a. 1- True, 2- False
b. 1- False, 2- True
c. 1- True, 2- True
d. 1- False, 2- False
55. Specialty stores concentrate on limited types of merchandise, cater to a ............, and offer
specialised services to focus on a target audience, based on the ............... .
a. Mass market, geographies
b. Industrial market, psychometrics
c. Niche market, demographics
d. Foreign market, geo-demographics
56. The corporate objective of a fashion retail store is to ............, while that of mass retail store is to
............... .
a. Attain return on asset target, meet the profitability targets
b. Increase gross margin, enhance turnover
c. Align product range with category structure, provide a balanced assortment
d. Maintain exclusivity, provide a large number of product lines
57. The process of retail distribution involves the following steps:
1. Sending Advance Shipping Notification (ASN) by the supplier to the place of shipment
destination, which can either be a retail store or retail warehouse.
2. Managing merchandise in a retail store by the retailer or the supplier based on the product
availability.
State True or False:
a. 1- True, 2- True
b. 1- False, 2- False
c. 1- False, 2- True
d. 1- True, 2- False
58. If the supplier uses tailored raw material with long supply lead time to fulfil customers’ orders, the
order period is divided into ............ period and ............... period.
a. Long order, short order
b. Tailored order, ready for delivery
c. Firmed order, ready for production
d. Ready for sale, ready to consume
59. The chemical organisations .............. their product design and development, as their products are
............. due to the components used in it.
a. Outsource, costly
b. Do not outsource, costly
c. Outsource, unique
d. Do not outsource, unique
60. Retailers widely use four main distribution channels that are:
1. Partly outsourced to traditional service providers such as transporters, clearing and
forwarding agents and stockist.
2. Partly or entirely outsourced to fourth-party logistics providers (4PLs).
State True or False.
a. 1- True, 2- False
b. 1- False, 2- True
c. 1- True, 2- True
d. 1- False, 2- False
61. Consider the following statements about buying function of merchandise for different types of
retailing:
1. In mail order retailing, the buyer is required to prepare a plan in advance to procure the
merchandise.
 2. In catalogue retailing, the buyer needs to be aware of the products bought by the customers
frequently, so that they can procure these products as soon as possible.
State True or False:
a. 1- True, 2- False
b. 1- False, 2- True
c. 1- True, 2- True
d. 1- False, 2- False
62. ............. colour surrounding makes a person feel like time is passing swiftly and .............. colour
excites and stimulates people.
a. Blue, red
b. Violet, orange
c. Brown, yellow
d. Grey, blue
63. Consider the following statements:
1. In a retail store, related merchandise is placed near each other to increase the impulse
buying, like pecan pie and ice cream, fish and rice, and cake mixes and cake tins.
2. Rice and pulse items are generally sold at low margins by the supermarket/hypermarket
chains to entice the customers to revisit their establishments.
State True or False:
a. 1- True, 2- False
b. 1- False, 2- True
c. 1- True, 2- True
d. 1- False, 2- False
64. Consider the following statements:
1. Some planogram technologies used by the retailers are SAS MarketMax and Galleria.
2. Planograms decrease movement at full retail value while lowering carrying costs, and
decreasing out-of-stocks and excess inventory to enhance overall profitability.
State True or False:
a. 1- False, 2- False
b. 1- True, 2- True
c. 1- False, 2- True
d. 1- True, 2- False
65. Fill in the blanks:
1. ............. colour scheme goes well with a soft and subtle décor.
 2. In ............. colour scheme, one colour would be the base colour, while the two colours on
each side would be complementary.
a. 1- Triadic, 2- Complementary
b. 1- Monochromatic, 2- Double complementary scheme
c. 1- Analogous, 2- Split complementary
d. 1- Tone on tone, 2- Triadic
66. Consider the following statements about third phase of retail evolution:
1. The third phase started in late 1990s and early 2000, which is considered as the organised
retail boom period.
2. It came into existence in some parts of Africa, Central and South America, South-east Asia,
China, India and Russia, and still continues to grow at a rapid pace.
State True or False:
a. 1- False, 2-False
b. 1- True, 2- True
c. 1- True, 2- False
d. 1- False, 2- True
67. The correct sequence of merchandise hierarchy with seven levels is: Division, department,
category, sub-category, ............., style and ........... .
a. Options, range
b. Functions, brand
c. Brand, options
d. Options, combination
68. Consider the following statements about lighting:
1. Lighting from ceiling, showcase lighting and valance lighting are the common measures of
atmosphere lighting.
2. Primary lighting uses fluorescent or incandescent lights mainly.
State True or False:
a. 1- False, 2- True
b. 1- True, 2- False
c. 1- True, 2- True
d. 1- False, 2- False
69. Merchandise planning has the following implications on finance:
1. Establish targets for key financial considerations, such as returns and markdowns, based on
corporate objectives.
 2. Prepare department or category-level plans for key financial indicators, including returns,
markdowns, costs of goods, gross margin, supply chain costs and gross profit.
State True or False:
a. 1- True, 2- True
b. 1- False, 2- False
c. 1- False, 2- True
d. 1- True, 2- False
70. The main job of a merchandiser is to ensure that right products with right quantity are provided to
the customers at/in the .......... and at/in the ..............
a. Right time, right place
b. Right price, right assortment
c. Right place, right store
d. Right warranty period, right packaging
71. Consider the following statements about colour schemes:
1. The two colours in tone on tone colour scheme should not be used in equal extents of
lightness or darkness.
2. Triadic scheme includes a combination of three colours by selecting every fourth colour from
the colour wheel.
State True or False:
a. 1- True, 2- True
b. 1- False, 2- False
c. 1- False, 2- True
d. 1- True, 2- False
72. The retail exchanges have several methods to charge for their services like:
1. A commission on the transaction
2. Another is reverse auction, where there is one seller and many buyers
State True or False:
a. 1- True, 2- True
b. 1- False, 2- False
c. 1- False, 2- True
d. 1- True, 2- False
73. Designed to facilitate the administration and optimisation of the ............ business processes
across an enterprise, the ERP system uses ............... hardware and software components.
a. Internal, single
b. External, single
c. Internal, multiple
d. External, multiple
74. Consider the following statements about Direct Store Delivery (DSD):
1. The term DSD is used by the retailers to indicate the products that are delivered and placed
in the retail store shelves by the manufacturer.
2. Manufacturer is able to identify new sales opportunities by getting the market information
directly.
State True or False:
a. 1- True, 2- True
b. 1- False, 2- False
c. 1- False, 2- True
d. 1- True, 2- False
75. Complete the following statements about market entry strategies:
1. ............. manages warehouse space, picks route plan and provides information about the
location at which an item is stored for easy picking.
2. ................ is among the first retailers to use computers to track inventory, and the first to
adopt bar codes, Electronic Data Interchange (EDI) for better interface with the suppliers and
wireless scanning guns.
a. 1- Warehouse Information Planner, 2- Showoff
b. 1- Warehouse Planning System, 2- Marks & Spencer
c. 1- Warehouse Information Solutions, 2- Big Bazaar
d. 1- Warehouse Management System, 2- Walmart