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