CPCM Study Guide

Question 1

True or False. Assortment planning technology can optimize product selection by filtering options to generate tailored plans that match retailers product classification strategies

Answer 1

TRUE

Question 2

Which of the following is the biggest limitation to applying Activity Based Costing?

Answer 2

The ability for Retailers to track/measure detailed cost data

Question 3

What of the following statements BEST describes Activity Based Costing (ABC)?

Answer 3

A method to more accurately identify Overhead Costs when they are not tied to Direct Labor

Question 4

What is the correct formula for GMROII?

Answer 4

Annual Profit/Average Inventory Cost

Question 5

Which of the following descriptions does not describe activity-based costing?

Answer 5

A model that spreads the cost of a company’s activities evenly across all the company’s products. The costs are not allocated evenly across all products, but according to the amount that is consumed.

Question 6

Which of the following most accurately describes Incremental Contribution? (Select the best answer)

Answer 6

Identifies the additional Category Volume from adding a particular item

Question 7

A supplier decides to introduce a new product size in Brand A, which is a 12-pack of smaller-sized products than the original lineup. What is this an example of?

Answer 7

Product line extension. Because it’s a new item in the same brand in a different size.

Question 8

True or False. Shopper loyalty card information is always included in syndicated scanner data

Answer 8

FALSE

Question 9

True or False. Vendors can create external data references to their syndicated scanned sales data from Nielsen or IRI

Answer 9

FALSE

Question 10

Which of the following is the LEAST important consideration as it relates to creating a monthly store-level report that needs to be refreshed monthly with updated syndicated scanner data

Answer 10

Identify a contingency plan in case the data vendor databases go off-line

Question 11

The data cube describes market facts along what 3 dimensions for a specific data measure (example % ACV)?

Answer 11

Product, geography, time period

Question 12

True or False. Syndicated scanner data (derived by Nielsen or IRI) is sometimes considered incomplete because not all retailers in a market share their data

Answer 12

TRUE

Question 13

Which of the following is the best analysis that you can perform through purchase frequency and shopping basket information in retail point of sale

Answer 13

Shopper insight analysis

Question 14

What is Brand X’s purchase frequency if it has a total of 5,255 trips and 2,160 buying households?

Answer 14

2.4.
The formula is: purchase frequency = total number of trips (5,255) / buying households (2,160) = 2.4 purchase frequency

Question 15

The “share of requirements” or “share of wallet” measures the extent to which a product satisfies a consumer’s requirements in a category. What is another term for this measure?

Answer 15

Product loyalty

Question 16

Which of the following is an example of buyer conversion?

Answer 16

A widget category shopper usually buys widgets at Retailer X. While doing his grocery shopping at Retailer Y, he notices a floor display and decides to buy his widgets at Retailer Y instead of Retailer X.

Question 17

What is the foundational data element used to organize and measure product performance in household panels?

Answer 17

UPC

Question 18

A retail category manager analyzed the % of dollars they were capturing in the widget category, and the % they were losing to competition. Which of the following best describes this type of analysis?

Answer 18

Leakage analysis

Question 19

. What is the share of category sales for Brand X given the following information:
Brand X $ sales = $225,000
Brand X unit sales = 50,800
Category $ sales = $984,000

Answer 19

The formula is: Brand X $ sales ($225,000) / Category $ sales ($984,000) = Share of category sales (22.9)

Question 20

What is the difference between buyer conversion and leakage?

Answer 20

Buyer conversion measures the percentage of category buyers lost to other stores and leakage measures the percentage of category dollars lost.

Question 21

Which innovation has most significantly advanced the grocery retailer’s control of the distribution channel?

Answer 21

The development of scanners and the UPC codes

Question 22

Which of the following analysis examples is NOT enabled by the use of retailer’s POS data?

Answer 22

Competitive pricing analytics

Question 23

True or false. Loyalty data has little to no value when creating store clustering.

Answer 23

FALSE

Question 24

Why would you need to “cleanse” point-of-sale data you receive from a retailer?

Answer 24

The data must be checked for discrepancies and errors

Question 25

Which of the following is the LEAST important requirement to establish effective retail store clusters?

Answer 25

Increased reliance on multiple data sources

Question 26

True or false. Retail "store clustering" and "geographic grouping" are terms for the same thing.

Answer 26

FALSE

Question 27

 True or false. Retailer point of sale data is available in a consistent and standardized format across different retailers

Answer 27

FALSE

Question 28

When determining product assortment and considering how it affects the shelf, what are the two most important factors that retailers need to consider

Answer 28

Variety of items and shelf capacity

Question 29

Retailer X has listed a new "Brand X" on in its category assortment. This brand is a value-priced brand, similar to the more expensive Brand Y brand the retailer already carries in the category. What would be the best place to shelve these two brands to maximize sales

Answer 29

Retailer X should not place the brands adjacent to each other on the shelf to avoid trading down from Brand Y to the less expensive Brand X

Question 30

Product A has 6 facings and holds 6 units per facing. Its weekly movement is 10 units per week (520 units per year). What are the inventory turns for Product A?

Answer 30

14.4 520 units per year / (6 facings x 6 units per facing) = 14.4

Question 31

Of the following benefits to planogram development for retailers and manufacturers, which one LEAST benefits the all-important shoppers?

Answer 31

Maximizes ROI on the space utilized

Question 32

The bottom shelf in a gondola is usually deeper than the other shelves, and has more:

Answer 32

Shelf capacity

Question 33

Which of the following statements is LEAST accurate as it relates to shelf management?

Answer 33

Store level sales data should not be used in the development of planograms

Question 34

Retail scanned sales data usually includes which of the following types of information?

Answer 34

Dollar and unit sales, profit, transactional, basket and time aggregates.

Question 35

Which of the following attributes is not customarily used to create store clusters?

Answer 35

Shelf inventory

Question 36

Review the table that shows results of an in-store test. Which is the correct conclusion you can draw from this data?

Answer 36

The test stores performed better than the control stores by 12%

Question 37

Which of the following analytics is NOT available in retailer scanned sales data?

Answer 37

Market shares. Through a compilation of banners in the data

Question 38

Which of the following retail scanned sales data components allows retailers to track organic growth in their business (or all stores ex new store openings)?

Answer 38

Comp stores

Question 39

Refer to the diagram. Which brand is most reliant on TPR sales?

Answer 39

Brand B

Question 40

Which of the following measurements can be MOST influenced by ghost inventory, visual out of stocks, and location of inventory in the store?

Answer 40

In stock/Out of stock

Question 41

Following is some information about the "mid/upscale suburbs Age 18-34 with kids" demographic segment for the market and for store #55. Calculate the demand index based on this information and select the best answer (including demand index and interpretation from the answers below. % households in market: .28 % households for store #55: 3.33

Answer 41

1189 demand index, indicating the store has a high % of households in the mid/upscale suburbs with kids relative to the market.

Question 42

Which of the following BEST describes what a product demand index measures?

Answer 42

The potential to have high demand for the product

Question 43

True or false. A demand index measures whether the target product group has been sold in a store.

Answer 43

FALSE

Question 44

You know that a specific consumer demographic is a target consumer for a manufacturer. What would be the best approach (using geodemographics) to identify the best stores to carry this product?

Answer 44

Use data management software to identify stores with heavy concentrations of the target consumer demographic

Question 45

Calculate the "Sales Index" based on the following information. (Hint: Calculate store sales per $MM ACV first) Store sales= 10,000 Store ACV= $25,000

Answer 45

66

Question 46

Too much data can overwhelm anyone who is analyzing data. What is the best way to approach large data sets

Answer 46

Focus on key business issues

Question 47

Which of the following dimensions would NOT add value in a category health assessment?

Answer 47

All would add value to the assessment

Question 48

True or False. You should not segment item level data unless you have a properly researched consumer decision tree

Answer 48

FALSE

Question 49

What are the four key areas (or perspectives) that should be considered in a category review (also known as the "4 C's")?

Answer 49

Consumer, Category, Company, Competition

Question 50

How do you determine fair share of features for a brand?

Answer 50

Share of features for that brand divided by the brand's dollar share within the category

Question 51

What is a causal factor tree?

Answer 51

It is a process used to determine how to perform a root cause analysis

Question 52

Why would a category manager need to use a cause and effect diagram?

Answer 52

To help identify, explore, and display possible causes related to a problem or condition

Question 53

Refer to the table. in which two segments is the retailer losing the most market share

Answer 53

Ground and Large

Question 54

Index vs ACV" calculations are an effective way for retailers to benchmark themselves against the market. What is ACV and how is it calculated?

Answer 54

All commodity volume, calculated by summing up all category sales within an area to get a total ACV number

Question 55

Name the four best drivers that a category manager should understand when assessing display performance

Answer 55

Reach, Response, quality, frequency

Question 56

information collected from shoppers who scan their purchases with hand held reader that automatically uploads the information to a syndicated data provider

Answer 56

Household panel data

Question 57

In-depth surveys, focus groups, observational, video monitoring, and ethnographic research

Answer 57

Qualitative & quantitative research

Question 58

Information collected by observing shoppers while they shop, then asking them a defined set of questions

Answer 58

In-store shopper research

Question 59

What is the difference between scanner data and panel data?

Answer 59

Scanner data helps you understand what has happened to a brand's sales and share, while panel data helps you understand why a brand's sales and share have declined or increased

Question 60

Data gathered from the individually recorded transactions of thousands of retailers, compiled into a database

Answer 60

Syndicated Scanned data

Question 61

A retailer's income statement captures cash discounts from manufacturers in what section?

Answer 61

Other income

Question 62

Which line on the balance sheet captures merchandise inventory?

Answer 62

Current Assets

Question 63

if an item has average inventory levels of %75,000 and annual cost of goods sold of $450,000, what is its inventory turns

Answer 63

6 Cost of goods sold/average inventory

Question 64

If an item has a cost of $4.00 and a retail price of $7.50, what is its markup % (round to 1 decimal place)?

Answer 64

87.5 (Work= (Retail Price — Cost) / Cost = ($7.50-$4.00/4.00))

Question 65

True or False. Category managers can influence gross profit through retail price and unit cost

Answer 65

TRUE

Question 66

The lost sales from theft are accounted for in the income statement by:

Answer 66

Deducting it from sales as Shrink