Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key


Play button


Play button




Click to flip

158 Cards in this Set

  • Front
  • Back
Retail price, wholesale cost, markup
Retail Price Elements
wholesale cost of an item
operating expenses, retail reductions, and profit; difference between the retail price and cost of goods sold
markup that doubles the invoiced cost of an item to achieve the retail price
keystone markup
markup found on one item or one stock keeping unit (SKU)
individual markup
when multiple units are considered together
gross markup
calculated using the initial or first retail price of all items at a point in time
initial markup
when an initial markup is based on actual retail sales for a period and not on initial retail prices
gross margin
actual retail sales
net sales
used to calculate the markups that can be achieved after adjusting for the charges of servicing the fashion goods
maintained markup
calculated for a group of items with different markups at a point in time
cumulative or average markups
builds the price of each item in the inventory from the cost of the item and the needed markup
component addition
levels used for groups of merchandise and are used by department stores and other stores with a wide variety of fashion goods to help the consumer discriminate among the similar items
price lines
a rise in retail price, leads to a drop in this
sale volume
formal document that is used for a variety of functions within a retail business
Profit and Loss Statement
also known as net operating profit; profit before taxes
net profit
net profit after taxes
bottom line
sum of the cost of doing business, except the cost of goods
operating expenses
when operating expenses are larger than gross margin
initial sales; net sales + reductions
gross sales
include elements of customer returns, employee discounts, markdowns, and stock shortages
amounts that are used to reduce the retail price of the item, for the consumer, based on damage to the item or on some other problem the customer may have in association with buying the item
special reductions in the retail price of items sold by the business to the employees of the business
employee discount
inventory that is lost, stolen, or damaged
stock shortages
the cost of moving the goods from the vendor's warehouse to the retail warehouse or store
can be directly attributed to a dept, function, or specialized activity; controlled expenses; ex: salaries, specialized hangers
direct expenses
general expenses that are incurred from running the total business and are not directly caused by any one activity; ex: heating, carpeting cleaning, rent
indirect expenses
change with the volume of sales/stock or time of year; ex: heating, snow removal
variable expenses
remain the same for every period or inventory; ex: manager's base salary and building insurance
fixed expenses
level of stock at the beginning of the month of on the first working day of the month
level of stock at the end of the month or on the last working day of the month
the amount of stock that is generally carried in the store during a select period
average stock
value or an expression of how fast merchandise moves through the store
stock turn
uses a constance level of stock and adds on amount for sales; provides the retailer with a suggested BOM or the planned stock level for the beginning of the month; Basic Stock$ = Average Stock$- Average Monthly Sales$
basic stock method
relate stock requirements to planned sales and are indication of the dollars of inventory needed to sell one dollar of merchandise
stock-sales ratio
uses predetermined ratios for estimating stock relative to the sales; =BOM$/Net Sales$
stock-sales ratio method
a working document that the retailer uses to transition from the expanded P&L statement to the assortment plan for shopping in the market
six-month plan
indicates the amount of merchandise that can be brought into stock during a given period
planned purchases at retail
used to indicate the wholesale value of the merchandise; open-to-buy or OTB
planned purchases at cost
sort products by distinctive features and provide structure and organization for a collection of items
merchandise classifications
more commonly used assortment format
outline format
classification system shown as a tree with spreading branches
tree format
organized collection of related merchandise, which includes specifications for brands, colors, sizes, and material
assortment plan
when retailers use a set figure as a goal or a comparison point
given when a buyer purchases a large number of units within one SKU
quantity discounts
offer the retailer a premium or discount for paying promptly or for paying early
cash discounts
when the full amount is due (n/30)
net period
this dating is advanced dating and indicates that the goods have been "postdated" to allow for the shipment or to allow extra time for discount
"as of"
includes "extra dating" and extends credit for additional days in which to receive the discount
X Dating
a discount applied if the invoice is padi before the end of the cash discount period, and is considered a bonus or allowance for early payment and as "interest" that is dedicated from invoice
to write a purchase order and leave it with the vendor
drop paper
an additional discount that can be negociated
stock that is hidden on the sales floor
forward stock
stock that is in the backrooms at stores
reserve stock
the merchandise that arrived first in the store is considered the first that is sold; underestimates the value
first in first out (FIFO)
value is based on the last cost; overestimates the value
last in first out (LIFO)
the value of the inventory as kept in the handwritten ledgers or computer system
book value
book value-physical count
shortage or overage
the amount of markdown that is not used or difference between sales price and the Retail 3 price
Markdown Cancellation
planned sales$= planned cost$ + planned markup$
cost plus method
when items are sold at wholesale cost or below
loss leaders
workroom costs; expenses that occur in preparing the merchandise to be placed on the floor or to be sold to a specific customer
a long-range plan to guide decisions about the retail or vendor matrix, the merchandise assortment, standards for quality, the use of brands, the fashion level of the products, and the merchandise presentation
merchandise policy
wide array of product classifications represented among the merchandise but few items within each class
broad and shallow
pricing policy of the business
pricing strategy
vendor matrix; listing of vendors, manufacturers, or other suppliers who provide merchandise for the retail business
retail matrix
total mix of merchandise that is carried by the retailer
merchandise assortment
floor stock and backroom stockcombined
stock on hand
stock that has been ordered from the manufacturer or vendor but has not yet been received by the retailer
stock on order
turn of stock is higher than the replenishment rate
stock out
planned sales$ = #square feet x $per square foot
square foot method
right goods, right price, right location, right consumer, right time, right quantity
merchandise "rights"
items that customers bring back to the store after the items have been purchased and taken out of the store
customer returns
an identifying number
stockkeeping unit (SKU)
the time when the cash discount period starts
includes discounts, cash discounts, delivery time and method, loading, and anticipation that may be assigned to any merchandise order
"cash on delivery"; used when the vendor does not know the retailer or the retailer does not hae a strong line of credit
"date of invoice"; if no other dates are given, then the date of invoice is the start time for dating
"receipt of goods"; the cash discount period and net period begin with the date of receipt of goods
"end of month"; dating starts with the end of the month and the invoice is paid within the specified number of days after the end of the month in which goods are invoiced
explain the number of classification of goods and the number of items that are carried by one retailer
merchandise breadth and depth
functions of store management
the dollar function; also known as the financial control
control function
includes all of the public relations, publicity, and promotional activities of the store
amounts that are used to reduce the retail price of the item, for the consumer, based on damage to the item or on some other problem the customer may have in association with buying the item
explains the company's role in the selection and presentaion of merchandise for the customer
merchandising philosophy
P&L statement is used as this; retailer can plan the expected sales, cost of good to be sold, and the margin needed on these goods to cover the operating expenses that are paid to vendors and other services to operate the company
planning tool
after the planned period passes, the actual amounts collected and paid can be compared to the planned amounts from the P&L statement
analysis tool
when the buyer has too much inventory in relation to the planned levels
the markup is established by the component addition method; planned sales=planned cost+planned markup
cost plus method
level of stock at the beginning of the month or on the first working day of the month
beginning of the month; BOM
level of stock at the end of the month or last working day of the month
end of month; EOM
speed of the stock coming into the store
replenishment rate
also known as trade discounts or cumulative discounts; each discount is taken from the preceding net amount before applying the next discount
series discount
stock that has been ordered from the manufacturer or vendor but has not yet been received by the retailer
stock on order
actual values that are transcribed through the store activities are comparable to the values created in the plan
meet plan
sort products by distinctive features and provide stricture and organization for a collection of items
merchandise classifications
a technique where the buyer examines the cost, retail sale, and markup for the items that are sold by the retailer
unit control
a shortcut method for finding the final discount price and involves finding the complements of the discounts and using them to find the final discount price
on percent method
shopping for the best vendor and purchasing merchandise from that vendor
the retailer uses the retail price or the selling price as the value base for the inventory
retail price method
provide an outline or guide sheet of the optimum stock stock types and levels that should be maintained
model stock plans
uses total retail sales for a period as the value base of the inventory; cost or value of the inventory is calculated based on a percentage of the retail sales; average markup is used to determine the complement of the cost
quick method
amount of markdown that was actually used
net markdown
multiple items receive the markdown
gross markdown
the value at which the merchandise is priced when selling to the consumer
retail price
beginning value or standard used for affixing a price or value on the merchandise
value base
also known as P&L statement; refers to the aspect of the statement using the expected dollar sales or accountants who are formulating analyses may use this term
income statement
another name for P&L statement; implies the function of the P&L statement that expresses all of the operating expenses and shows the dollars needed to pay the bills for the company
operating statement
retail price is established by estimating the price desired by the target market
market pricing
cost is also known as...
cost of goods
wide array of goods
pricing policy of a business; must fit the image-full price to everyday discounted price
pricing strategy
merchandise, equipment, and supplies
using initial cost as a standard for affixing a price or value on the merchandise
cost valuation
breakage and theft of merchandise by customers and employees
example of indirect expense
rent, utilities
example of direct expense
historical retail records are used as a starting point for establishing current retail prices
past records method
record of past sales, not a projection of future sales; indicate what was sold
point of sale
created by partially dissolving the surface of a nylon or polyester fabric; shrinks
puckered surfaces
converted from either law or print cloth; alkali shrinks the fabric in treated areas
decorated by hand or by machine with a surface applied thread
colored compounded printed on the fabric expands during processing to give a three-dimensional texture to the fabric
expanded foam
pile or napped fabric in which the surface has been cut to remove loose fiber or yarn ends
cleans off fiber ends
layer of fiber ends raised from ground weave of the fabric by a mechanical brushing action
produces a fabric with a soft hand
finished used on linen, pressure flattens the yarns into oval shape
process of heat setting, dyeing, and finishing glass fiber in one continuous operation
pumice or some other abrasive material is saturated with a chemical such as potassium permanganate and tumbled with the fabric or garment for varying times
abrasive washes
special chemical is added to the wash solution to alter the fiber's surface
chemical wash
use cellulase and has a permanent effect on the surface of the fabric, and the hand becomes softer
enzyme wash
removes the sericin
used to create a synthetic with a hand and texture like silk
caustic treatment
thermoplastic acrylic resins that fix fibers more firmly into the yarns so they do not break off as readily
abrasion-resistant finishes
yarns are bonded at their interlacing points
antislip finishes
used on dye-fiber combinations that are suspectible to fading when exposed to atmospheric fumes or pollutants
fume-fading-resistant finishes
increase moisture absorbency of the fabric and increases drying time
water-absorbent finishes
improve the hand of harsh textiles, which may develop as a result of resin finishes or heat setting of synthetics
fabric softeners or hand builders
minimize heat flow
phase-change finishes
insoluble color particles that are held on the surface of a fabric by a binding agent
organic compound composed of a chromophore
consists of adding colored pigments or dyes to the spinning solution before the fiber is formed
mass pigmentation; solution dyed; dope dyed
used when mottled or heather effects are desired; dye added to loose fibers before yarn spinning
stock or fiber dyeing
cane be done with yarn in skeins, with yarns wrapped on cones or packages, or yarn wound on warp beams; less costly
yarn dying
bolt or roll of fabric is dyed
piece dyed
piece dying of fabrics made of fibers from different generic groups
cross dyeing
after the fabric is cut and sewn into the finished product
product or garment dyed
textile is circulated through the dye bath; used at any stage
batch dyeing
used to add color in localized areas only
color is applied directly to the fabric in the pattern and location desired in the finished fabric
direct printing
piece dyed fabrics in which the design is made by removing color from selected fabric areas
discharge prints
block color absorption during yarn or fabric dyeing or during color application
resist methods
a hand process in which hot wax is applied to a fabric in the form of a design
hand process in which areas of the yarn or fabric are wrapped with thread or string
tie dye
an ancient form of resist printing; tied, died, then woven
mesh screen is coated with a compound that seals all openings in the screen and prevents the dye paste from moving through the screen, except in the areas to be printed according to the design
screen printing