Marketing Dynamics
Chapter 28. Retail Inventory—Terms and Definitions
assortment. Selection of goods that a retailer carries.
electronic data interchange (EDI). The business-to-business exchange of data
(information) by way of computers using standard formats.
inventory planning. Deciding which goods to buy, when to buy them, and in what
quantities; the goal is to satisfy customer demand while keeping inventory costs low.
inventory shrinkage. Difference between the perpetual inventory and the actual physical
inventory.
just-in-time (JIT). Distribution strategy: materials should not be delivered to the factory
until the moment they are needed for production; similarly, finished goods should not be
delivered to a retail store until the moment they are needed for sale.
merchandise. Goods to be sold directly to consumers.
perpetual inventory. Consists of keeping a record (usually on computer) of the total
number of each SKU in inventory, and then adding whenever new items are received and
subtracting whenever items are sold.
physical inventory. Consists of actually going into the storage and sales areas and
counting every item.
receiving. Actual exchange of goods between the vendor’s transporting agent and the
retailer.
shoplifting. Stealing of merchandise from a store by a person posing as a customer.
stocking. Moving merchandise from storage to the sales area.
stock-keeping unit (SKU). Smallest unit of an item for which sales and stock records are
kept.
stockroom. Storage area within a store’s building, usually in the back of the store.
stock turnover. Number of times the average inventory on hand is sold and completely
replaced in a specific time period, such as a year; also called inventory turns.
universal product code (UPC). Type of bar code; it consists of black bars and white
spaces of varying thicknesses, and a set of numbers; the standard UPC has 12 numbers.
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