ASSIGNMENT DRIVE FALL 2014

PROGRAM MBADS (SEM 3/SEM 5) MBAFLEX/ MBA (SEM 3) PGDROMN (SEM 1)

SUBJECT CODE & NAME ML0012-Store Operations
BK ID B 1763 CREDIT & MARKS 4 Credits, 60 marks
Q.No 1 Managing a retail store is a complex activity. Explain this statement in
context to the role of a Retail store manager.
Explanation of the roles 10
Answer:
Managing a retail store is a complex activity. Retail store running cost is continuously
increasing. More and more stores are coming into picture and competition is becoming tough
day by day. Profits are continually shrinking. Therefore, the role of retail manager becomes
more crucial under the circumstances. Retail store managers are accountable for successfully
running a retail store. Some store managers manage a section, while others are responsible for
managing the whole stores. In the changing scenario, besides the routine tasks, the store
managers will be responsible for implementing new techniques through which a store can cut its
expenses and increase profitability.
Being a retail store manager means:
1. Analyzing sales records and predicting future sales on continuous basis
2. Ensuring high quality standards for overall quality, customer service and safe trading
environment
3. Handling customer complaints as a basis of further growth
4. Having proper check on competitors movements
5. Making certain that your store meets its sales targets as decided by management with mutual
consent
6. Managing sufficient merchandise levels
7. Organizing sales promotion drives at regular intervals
8. Recruiting, training and developing store staff whenever and wherever required
9. Searching for new ways to increase stores sales and pick up efficiency
10. Continuously managing and motivating staff

2 Explain the activities required in maintaining a store with its components

o
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Explanation of store maintenance

Explanation of its two components 4+3*2=10

Answer:
Store maintenance includes all the activities involved in managing a stores facilities, such as
management of exterior and interior physical facilities. The exterior facilities include the
parking arrangements, the entrances to the store, and signs and windows outside the store.
Interior facilities include the arrangements for windows, walls, flooring, ceiling, climate control,
energy use, fixtures and shelves, displays, and signs and sidewalks.
The arrangements and quality of store maintenance affect both the sales generated in the store
and the cost of running a retail store. Good interiors, such as a clean floor area, affect shoppers
perception towards the store; and exterior facilities, such as sufficient parking, attract shoppers.
Further, regular maintenance lengthens the useful life of air conditioning units, floors, electric
equipments, shelves and fixtures. Shoppers will not come to a store whose washrooms,
staircases, elevators and floor areas are poorly maintained. Thus, it requires regular cleaning of
lights, fixtures, washrooms, elevators, floor areas, dustbins, water coolers and air conditioners,
besides quick replacement of burned out lamps and tubes.
Some reputed chain stores even go so far as to replace all electric bulbs, tubes and lamps after
regular intervals to ensure constant colour, brightness and light impact throughout the stores.
Energy Management
Energy management is all about the managing expense on lighting, heating and cooling the
store area. Due to continuous increase in electricity prices for commercial use throughout the
country, energy management is now a major consideration in retail store management. For
retail stores that sell fresh fruits, vegetables and food stuffs, it is in fact critical. Therefore, most
of the retailers are using energy saving devices to cut the cost and get competitive advantage.
Store Security
Store security relates to the security and safety of store staff and merchandise kept in the store.
Since shopping malls are still only popular in big cities, in India, the concept of retail store safety
is quite recent. Most stores get their major portion of sales during day time. Even studies and

surveys have shown that malls are becoming unsafe as far as personal safety is concerned.
Parking areas are not properly maintained. Therefore, in order to ensure the security of the store
and the shoppers, proper arrangements should be made.

3 Describe the different types of store layouts.

Explanation of different layouts 10
Answer:
Types of Store Layouts:
1. Straight Floor Plan
The straight floor plan is the most common and oldest layout in practice. This layout is
inexpensive and easy to follow and may be used in any industry. In this layout, walls and fixtures
within the store are used to display merchandise. The floor staff finds this type of floor plan easy
to maintain on a daily basis.
2. Diagonal Floor Plan
The diagonal floor plan is the next most favoured type of layout for a retail store. It is good for a
self-service kind of a store where customers can move around and pick and choose the items
they require. The diagonal floor plan provides proper movement and traffic flow to the store
resulting in ease of issues and customer movement.
3. Angular Floor Plan
The angular floor plan is rarely used as it is expensive. This plan is actually suited for high-end
stores where merchandise items do not move as fast as in a daily-needs retail outlet. The angles
and curves of walls and fixtures in this type of floor plan make it difficult for the housekeeping
staff to clean the store regularly. However, the soft angles help the traffic flow within the store.
This layout is seen mostly in retail stores selling electronic goods.
4. Geometric Floor Plan
The geometric floor plan uses racks and fixtures to create an interesting and out-of-the-ordinary
store design within a small budget. This plan is recommended for clothing and apparel
merchandise stores. Due to the proper arrangement of display in this particular layout plan, the

users and storekeepers dont find moving around the stored goods difficult. From the economic
point of view, it does not involve any extra high cost.

5. Mixed Floor Plan

As the name implies, this type of plan is the combination of two or more layouts. A retail store
may be engaged in storing various types of merchandise under one roof. In such stores, a
particular type of layout plan is not suitable. Therefore, for the sake of convenience, stores use
the combination of two or more layouts. The mixed floor plan includes the straight, diagonal and
angular floor plans to create the most practical store design. The layout moves traffic towards
the walls and back of the store.
6. Dead Block Layout
It is a typical Indian traditional retail outlet, e.g., kirana store. Unlike modern retail outlets
there are no facilities like self service. The customers are required to put up their queries to the
salespeople/owner for the needed items. They do the task of fetching these out for the customer.
The items are placed in comparatively small shops. The layout arrangement is decided by the
owners/salespeople as per their convenience of fetching them at the shortest notice. Generally,
the items having the most probability of being purchased on a routine basis are placed within
easiest reach.

4 What are the different classification of retail merchandise?

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On the basis of nature

On the basis of usability and condition of merchandise 5+5=10

Answer:
Classification on the Basis of Nature of Merchandise
1. Apparel: Apparel merchandise is anything that a human being puts on his body. Clothing,
hats, gloves, shoes and scarves, etc., come under the category of apparel.
2. Consumer durables: Any type of product that is purchased by consumers for long-term
usage usually falls under the category of consumer durables. As opposed to many goods that are
intended for consumption in the short term, consumer durables are intended for repeated or

day to day usage. Prominent goods under consumer durables are refrigerator, mobile phones,
cars, household appliances (mixer, juicer, grinder, etc.), sports items and toys.
3. Fast Moving Consumer Goods (FMCG): As the name suggests, under this category,
those items are included which are part and parcel of daily life and used by everyone.
Irrespective of season, these items are in demand
4. Chemicals: Chemicals are liquid contents used for domestic and nondomestic purposes.
These are stored, preserved and issued to various retail departments carefully as they may be
prone to explosion and can put human life in danger
5. Furniture: Movable items of a house or a room such as chairs, tables, racks, cabins, stools,
benches, etc., come under furniture. As these items are widely used, they require proper
maintenance and proper record keeping.
6. Inflammables: Items that are hazardous and highly susceptible to fire and temperature
come under this category. Due to their inflammable nature, these items are generally stored
away from the general merchandise.
7. Scrap merchandise: Scrap is any item that has been used earlier and has no economic
value in the primary market. This is also the leftover merchandise that generally comes out of
the packing and unpacking process as waste. Scrap is sold in the secondary markets to scrap
merchants (kabadis) to fetch some value out of it.
8. Packaging merchandise: In a retail store, people not only buy goods for their own
consumption and use but also for giving gifts to their near and dear ones. These goods are
packed in wrappers, plastic, polythene, wooden containers, clothes, crates, drums and bottles.
Protective coating such as grease, wax, plastic paints, waterproof packs, plastic cans and bags is
also used while packing merchandise. Therefore, most of the retail stores keep enough stock of
wrapping merchandise such as paper, polythene sheets/rolls, saw dust, wood carvings, straw,
etc. During festival seasons and some special days like Valentines Day, Fathers day, Mothers
day, Teachers day, etc., the demand for packaging merchandise becomes high.

9. General merchandise: Products that is not included under any of the above-mentioned
categories fall under this category. In larger organizations, the store department is maintained
separately from other stores under an independent in-charge. This department deals with such
items that are necessary to conduct day-to-day operations. Items of general use, such as floor
cleaners, soap, brooms, uniforms for staff, stationery items, electronic tools like loose batteries,
wire, tape, adhesive, folders, papers and duplicate keys are kept in the general section of any
retail store.

Classification on the Basis of Usability and Condition of

Merchandise
(i) Serviceable, unserviceable and obsolete merchandise: Serviceable merchandise is
that which has developed a temporary malfunction. If proper service or replacement is provided,
it may become serviceable again and its useful life may thus be extended for some more time.
Unserviceable merchandise is that which has been utilized to the maximum possible extent.
Thus, it has lived out its lifetime and can only be sold as scrap. Any amount of service, repair or
replacements cannot make it usable. Obsolete merchandise is outdated because of either
redundant technology or because they are not fit to be used anymore (for example, video tapes,
landline phones, pagers and out-of-fashion outfits). This is common in organizations where due
to employee negligence or improper record keeping, old merchandise lie unused and new
arrivals are used. This makes the merchandise purchased earlier obsolete.
(ii) Dead stock items: Machinery, furniture, fixtures, vehicles, equipment, medicines, battery
cells, etc., which have some definite life but cannot be written off before their expiry date, are
included under dead stock. Dead stock is common in retailing where it becomes compulsory to
display the items which are not in frequent demand. Therefore, items lie unused after a certain
period of time, but due to accounting or other compulsions, cannot be sold as scrap.
(iii) Unused merchandise: This category of merchandise does not come under dead stock
items. Though fresh and unused, this cannot be sold to customers or wholesalers for certain
reasons:
(i) These are damaged and defective; (ii) there are some financial issues with the merchandise;

(iii) these items are declared unsuitable due to governments/municipal instructions. It is wrong
to include unused merchandise in the category of scrap and unserviceable merchandise as they
cannot be used because they are either unsuitable due to their dimensions, or have some
manufacturing defect beyond repair. Similarly, unserviceable merchandise is the used
merchandise which has been declared unserviceable because of constant usage and is thus
beyond service/repair.

5 Standardization is the process of establishing the acceptable levels of various

characteristics on the basis of study, experiment and statutory requirements
Comment
o
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Meaning of standardization
Explanation of different levels 3+7=10

Answer:
Standardization is the process of establishing the acceptable levels of various characteristics on
the basis of study, experiment and statutory requirements. It is different from specification. It is
beneficial to optimize the number of items and thereby reduce the stock levels. For the same
value of business, standardization reduces the variety to be obtained and stored, resulting in the
reduction of cost.
Different Levels of Standards
Standardization works at several levels. A standard may be related to a specific domain in which
it is applicable. Standards may be individual, industry-related, national and international. The
following list explains these different levels of standards in detail.
(i) Individual standards: Individual standards are used at a departmental or organizational
level. These are laid down by an individual user, for example, a finance executive may have a
practice for a certain method of record keeping. These successful individual preferences when
extended to the department become individual department standards. Similarly, the entire
organization by an agreement or consensus makes it obligatory to follow certain rules by all the
departments within the firm. They are then known as individual companys standards.

(ii) Industry standards: Industry standards are formed by a certain related statutory bodies,
companies and professionals, established by the government. Such bodies can be:
The Indian Medical Association
Federation of Indian Commerce
Associated Chamber of Commerce and Industry (ASSOCHAM)
Director General of Supplies and Disposal (DGS & O)
The Indian Society of Automotive Engineers
Directorate of Standardization for Defence Production
Textile Commissioner
Director General of Mines safety
Directorate of Marketing and Inspection (AGMARK)
Export Inspection Council
(iii) National standards: National standards are applicable at the national level and have
evolved by consensus or consultation of scientists, engineers, retailers, statutory bodies, users
and government departments. In India, ISI (Indian Standards Institution) set up in 1947, now
designated as the Bureau of Indian Standards (BIS), is a body jointly managed by the
Government and industry, and is responsible for establishing standards. The standards
established by the BIS are adopted throughout the country. The BIS has laid down specifications
for a wide range of merchandise and products. The BIS also alters old standards with the change
in technology, climate and international requirements.
(iv) International standards: These standards are evolved by bodies such as International
Organization for Standards (ISO). ISO, established in 1947, comprises more than seventy
national organizations like JIS, BIS, GOST, etc. ISO is the body responsible for general
standardization work at the international level. Besides ISO, International bodies which
specialize in specific areas are as under:
World Gold Council (WGC) to manage and maintain the testing laboratories (assaying centers)
to officially test the hallmark quality of gold The hallmark sign denotes the purity of gold, the
place where it has been tested and the jewellers mark.
Organization for Legal Metrology to evolve unifies practices, procedures and programmes in
the standardization of measurements.
International Conference on Weight and Measures to define and standardize the units of
measurement of physical quantities, measures and weight

6 Write short notes on:

a)Quality Control Procedure
b) Benefits of Merchandise Storage 5+5=10
Answer:
A) Quality Control Procedure
1. At the time of checking and receiving
(i) The receiving process is not complete until delivery receipts have been verified against the
corresponding purchase order, the distribution centre dispatch advice note and the consignment
note.
(ii) The receiving officer is empowered to refuse delivery of merchandise in case it is not as per
the purchase order or with the dispatch report issued by the distribution centre.
(iii) It is the sole responsibility of the receiving section to report to the purchase department and
distribution centre for any defective merchandise, shortage or sub-standard quality of goods.
2. At the time of delivery, to protect against any loss
(i) Receiving officer in-charge should ensure that the lot of boxes/ containers/cartons listed on
the delivery report is received in proper condition. In case of any shortage, it should be noted
carefully and discussed with the carrier representatives who have come for the delivery and his
signature should be taken on the details.
(ii) If the containers/boxes appear to be damaged in such a way that items inside may possibly
be pressed or damaged, open the damaged boxes in front of the carrier representative/driver
and inspect them for the level of damage. One copy of the receipt should be retained with the
receiver; the other copy should contain the details of damaged goods (how many cartons were
received and how many returned). Careful assessment of each container/box should be
conducted. In case any damage is discovered, the carrier company and the distribution centre
should be informed as soon as possible.

(iii) After receiving the merchandise, all the cartons should be opened and inspected for
concealed damage. Any damage noticed should be immediately informed to the distribution
centre.
3. At the time when concealed damage is discovered
(i) All damaged items must be retained with their respective containers and all inner packing
merchandise until carrier inspector makes an inspection.
(ii) Make phone call to carrier to report damage and request inspection. The information should
be given right upon the discovery of damage, and under no circumstances should it be put off
longer than fifteen days after delivery. Otherwise, as a normal practice, carriers often reject
stores claims on defective goods.
(iii) Ensure that you follow-up the call in writing so that you have it on record.
4. At the time when carrier makes inspection of damaged items
(i) Keep all damaged items in the receiving area. Make sure that the damaged items are kept
separate and have not moved from the receiving area prior to discovery of the damage. Make
provisions to allow inspector to inspect damaged items, inner packing, freight bill and cartons.
Keep safe the delivery receipt; it will be required as a supporting document when a claim is filed.
(ii) Once the inspection report is ready, it should be carefully examined before signing. If it is
not in proper agreement with what has been observed, do not sign it. Be sure the inspector
requests replacement on the inspection report. A new item can be ordered only if Replace is
mentioned in the inspection report.
5. After the inspection
(i) Do not display and stock the damaged merchandise. Even though the process of inspection
has been completed, damaged items cannot be disposed of or used without written permission
of the warehouse incharge.

(ii) Do not return damaged merchandise without the proper written authorization of the
warehouse incharge.
(iii) In case the carrier wishes to pick up these items for returning to the delivery centre, the
distribution centre does not forget to secure receipt from the carrier driver or representative.
This is for the receivers own protection and it can play a vital role. Therefore, it is generally
recommended that all calls be confirmed to the carrier in writing and one copy of this receipt
should be preserved.

B) Benefits of Merchandise Storage

Storage Systems have many benefits to offer to traders/businessmen, whether it is wholesale or
retail, it provides a number of benefits listed as under:
1. Assistance in selling
2. Ease of handling
3. Helps customers to locate things
4. Helps in ensuring continuous supply
5. Fewer chances of errors, emissions, and breakage
6. Safety and security of merchandise