What is Retailing?
What are the four dimensions of creating value for the consumers?
What is providing an assortment, breaking bulk, holding inventory and providing services.
Mention the four channels that exists within retailing and what each of them stands for?
Single-channel, Multi-channel, Cross-channel and Omni-channel.
What is Micro- and Cross merchandising?
Micro: retailer adjust shelf-space allocations to respond to customer differences among local markets.
Cross: retailers carry complementary goods and services to encourage shoppers to buy more.
What are the four dimensions of stock performance?
Cost, Quality, Variety and Time.
Mention the different kinds of distribution types and what each of them stands for?
Exclusive: Suppliers make agreements with one or few suppliers.
Selective: Suppliers sell through a moderate number of retailers.
Intensive: Suppliers sell through as many retailers as possbile.
Mention the pros and cons of Instore Retailing?
Pros: touch and smells, personal service, risk reduction, entertainment and social experience, cash payment.
Cons: costs to staff, rent, narrow assortment, less information for evaluating merchandise (better opportunity of market presence when being a pure click player).
Explain the aspects of GMROI.
Gross Margin Return on Inventory. It is a KPI, which evaluates merchandise management performance.
Go through the newsvendor model implementation steps.
Gather economic inputs
Choose an objective
Choose a quantity to order
Distinguish between service and merchandise retailing.
Sell service rather than merchandising.
Intangibility, simultannous production and consumption, perishability, inconsistency of offerings to customers.
What is Reverse Supply Chain?
When stores return items to DC or centralized return center.
Capturing value and/or properly disposing of returned merchandise.
Reverse supply chain refers to the movement of goods from customer to vendor or at least one step backward up the supply chain.
How will you improve the GMROI?
Inventory:
By reducing inventory or increase sales. Keep existing SKUs but reduce backup stock. Buy merchandise more often, in smaller quantities.
Gross Margin:
Increase prices, reduce COGS, reduce customer discounts.
Evaluate the quality of a forecast, meaning mention which criteria the forecast should live up to?
1. Unbiased, that is correct on average.
2. Close to the real outcomes as measured by either the mean squared error (MSE) or the mean absolute error (MAE).
- forecast error (difference between forecasted value and realized value)
- unbiased forecast (a forecast that is correct on average, thus forecast error that equals zero).
- biased forecast (a forecast that is wrong on average, thus forecast error that are different from zero)
What is a demand model?
A demand model specifies what demand outcomes are possible and the probability of these outcomes.
E.g., normal distribution, gamme or Poission distribution.
Explain the critical value.
The critical value is an estimate of how well performing the company is, meaning a ratio of one or more than one means a project is doing well on both cost and schedule while ratios below 1.0 imply poor performance.
Distinguish between drop-shipping and customer store pick-up.
Drop-shipping:
Shipping products that are bulky or heavy (directly from supplier to customer)
Store pickup:
Customers are ordering online and are picking up in the store/warehouse.
What types of merchandise categories are there?
Stable/basic, fashion and seasonal.
Mention the types of forecasting that we operate with in this course (under times series) and what each of them stands for?
Naive model, exponential smoothing, moving averages.
NM: the demand for the next period is to assume that it is the same as in the last period.
ES: a method that predicts the next value will be a weighted average between the last realized value and the old forecast.
MA: a method that predicts that the next value will be the average of the last m realized values.
Distinguish between density function and distribution function, please.
Density: the probability of a specific outcome is occurring (e.g., exactly 5 units).
Distribution: tells about the probability of an outcome will be a specific value of smaller (e.g., 5 or fewer).
Take me through both underage costs and overage costs.
Underage costs:
(Price - Costs)
Overage costs:
(Cost - Salvage value)
What is attribute-based assortment planning?
The method uses sales of existing products to estimate the demand for their various attributes and then uses those estimates to forecast the demand for potential new products.
Explain the five-step approach to implementing forecasting?
Collect date, establish the forecasting method, forecast future demand, make decision and measure the forecast error.
Describe the aspects of in-stock probability, stockout probability, expected lost sales, expected sales, expected left over inventory and expected profit.
Probability of all demand is satisfied.
Probability of some demand are lost.
The expected number of units by which demand will exceed the order quantity.
The expected number of units sold.
The expected number of units left over after demand (but before savaging).
Expected profit.