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Study Guide Exam 3

Chapter 11

Inventory Valuation
This chapter deals with some of the material that I have discussed as
part of inventory control. This chapter as well as chapter 15 should
help you with material that was discussed concerning inventory control.
Shortages and overages are discussed (pgs. 226-233). I will not be
holding you responsible for LIFO and FIFO material.

Chapter 15

This chapter deals with the Merchandise Control aspect of inventory.

I would like you to read this chapter for insight regarding the whole
issue of inventory control and reporting, etc. Most of my questions will
come directly from lectures and power points. Important topics to
study include: Inventory valuation (cost or retail), Unit control and
dollar control, the difference between a perpetual inventory system and
a periodic stock counting system, the significance of stock turn to
return on investment (inventory is the investment). In addition,
understand the impact of miscalculating ending inventory on Cost of
Goods Sold and Profit. These concepts were discussed in class.
Pricing Strategies

Chapter 12

Make sure that you read the entire chapter (pgs 241-269). Most of the
questions in the exam will come from the lectures. Make sure you
study the handout given concerning mark up both initial and
maintained. In addition, understand what markon is and how you
calculate it. Markdowns are also important understand what they
are, why they are used, and how to represent them as percentages. In
addition, understand how to calculate a markdown allowance. You do
not have to do anything that resembles what is illustrated on the back of
the handout however, you will need to be able to take summary
information and calculate different concepts such as Cumulative
Markdown % and Cumulative Off-retail MD % There will also be
various questions concerning retail pricing strategies such as leader
pricing, bait & switch, odd/even pricing, automatic markdowns, price
lining, early vs late markdown policies, price optimization systems, etc.
The material discussed in class will be most important.
Promotion

Chapters 5&16

I am not requiring you to read either of these chapters. Much chapter 5

focuses on marketing issues such as segmenting and targeting, etc. The
material at the end of this chapter (pgs. 106-114) could be helpful as it

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Study Guide Exam 3

deals with various forms of promotion. The in-class material
concerning advertising and publicity will be the important information I
use to develop exam questions. As far as chapter 16 is concerned,
questions will also be asked about display and presentation, etc. Some
of this material was covered in the chapter as part of Visual
Merchandising (pgs.379-394). You may want to read this section, but I
am not sure that it will be all that helpful since it does not deal with our
main focus of display and other visual merchandising techniques. Also
make sure that you understand the handout concerning Visual
Merchandising and its role with regard to promotion.

Customer Service
Lecture

Make sure that you look over the notes and video concerning customer
service. There will be limited questions concerning this topic since it
is not covered in the text. I will hold you responsible for anything and
everything that was discussed in the on the power pointsespecially
consumer credit.