Question 1

Which of the following is NOT a benefit to a high inventory turnover?

Accepted Answer

A)  increases sales volume because new merchandise is continually available to customers,and new merchandise sells better and faster than old merchandise
B)  improves salesperson morale
C)  reduces obsolescence risk and markdowns
D)  there are more resources available to take advantage of new buying opportunities
E)  lower profitF) A) and C)
G) None of the above

Question 2

________ categories consist of items whose sales fluctuate dramatically depending on the time of year.

Accepted Answer

A)  Expected merchandise
B)  Sample merchandise
C)  Staple merchandise
D)  Seasonal merchandise
E)  Fashion merchandiseF) None of the above
G) A) and B)

Question 3

Seasonal merchandise consists of items whose sales fluctuate dramatically depending on the time of the year.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements does NOT describe the relationship between product availability and stock level?

Accepted Answer

A)  The higher the product availability,the greater the amount of backup stock.
B)  The higher service level that a retailer tries to achieve,then the greater the amount of buffer stock to avoid stockouts on a particular SKU.
C)  If product availability is high,the retailer will increase inventory turnover.
D)  If the product availability sets too high,scarce financial resources will be wasted on needless inventory that could be more profitably invested in more variety or assortment.
E)  A very high level of product availability results in a prohibitively high inventory investment.F) D) and E)
G) A) and B)

Question 5

A vendor analysis that uses a weighted average to evaluate vendors is a ____.

Accepted Answer

A)  sell-through analysis
B)  GMROI
C)  ABC analysis
D)  inventory turnover analysis
E)  multiattribute analysisF) C) and D)
G) A) and B)

Question 6

The largest classification level in the buying organization is the category.

Accepted Answer

A) True 
 B)False

Question 7

What information would a planner use to make an allocation decision?

Accepted Answer

A)  store hours
B)  geodemographics
C)  geocensus
D)  exocensus
E)  service region per distribution centerF) A) and B)
G) B) and D)

Question 8

Why can a vendor in a better position to manage a category than a smaller retailer?

Accepted Answer

A)  Retailers manage brands more often than categories.
B)  Retailers manage merchandise groups having little experience with categories.
C)  Vendors have superior information through their focus on a specific category and acquire insights from working with different retailers.
D)  Vendors work to manage higher sales within their companies.
E)  Retailers are traditionally poor category managers.F) All of the above
G) A) and E)

Question 9

What is the first step in merchandise management planning?

Accepted Answer

A)  developing a forecast for sales
B)  execution of the plan
C)  develop a business plan
D)  determine the appropriate inventory levels
E)  penetrating a pricing strategyF) A) and E)
G) A) and D)

Question 10

________________ is the percentage of demand for a particular SKU that is satisfied.

Accepted Answer

A)  Product assortment
B)  Product availability
C)  Product satisfaction
D)  Product depth
E)  Product breadthF) A) and C)
G) None of the above

Question 11

What is the difference between variety and assortment?

Accepted Answer

Variety is the number of diffe...

Question 12

Assortment is breadth of a retailer's merchandise and the number of different merchandising categories within a store or department.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements does NOT describe the approach which deals with cycle (base) stock?

Accepted Answer

A)  A retailer tries to reduce the base stock to keep its inventory investment low.
B)  One approach for reducing the base stock is to reorder and receive merchandise from the vendor more often.
C)  More frequent orderings with smaller quantities will reduce transportation costs.
D)  Shorter delivery time from the vendor will reduce the level of base stock.
E)  Shorter order lead time from the vendor will reduce the level of base stock.F) B) and C)
G) A) and E)

Question 14

The percentage of complete orders received from a vendor is called _____.

Accepted Answer

A)  product availability
B)  order rate
C)  fill rate
D)  service level
E)  delivery ratesF) C) and D)
G) B) and D)

Question 15

An assortment plan is a list of the SKUs that a retailer will offer in a merchandise category and thus reflects the variety and assortment that the retailer plans to offer in a merchandise category.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following does NOT describe fashion merchandise categories?

Accepted Answer

A)  Forecasting the sales for fashion merchandise categories is more challenging than forecasting for staple goods.
B)  Buyers for fashion merchandise categories have much more flexibility in correcting forecasting errors.
C)  They have a short life cycle.
D)  Buyers often do not have a change to reorder additional merchandise after an initial order is placed.
E)  New products are continuously being introduced.F) B) and D)
G) A) and C)

Question 17

After developing a plan and allocating the merchandise,the next step in the merchandise planning process involves _______.

Accepted Answer

A)  replenishing the inventory levels
B)  planning for the following season
C)  analyzing the performance and making adjustments
D)  discussing buybacks with the vendors
E)  negotiating with the GMM and DMM for open to buy moneyF) C) and E)
G) B) and D)

Question 18

Certain advantages are inherent in rapid inventory turnover.List at least four of these advantages.

Accepted Answer

The advantages are (1)increased sales vo...

Question 19

In staple merchandise management systems,orders are generated by a computer system and transmitted directly to vendors using EDI,so why would a buyer or inventory planner be necessary?

Accepted Answer

A)  A buyer/inventory planner would need to monitor Strategic Profit Model results.
B)  A buyer/inventory planner could alter prices.
C)  A buyer/inventory planner could change assortments mid-season.
D)  A buyer/inventory planner would need to make adjustments for promotions and other external influences.
E)  A buyer/inventory planner needs to monitor daily performances.F) B) and E)
G) A) and B)

Question 20

Which of the following does NOT describe the department in the merchandise classification scheme?

Accepted Answer

A)  It is the second level in the merchandise classification scheme
B)  It is a lower level than the merchandise group in the merchandise classification scheme
C)  It is a level higher than classification
D)  The DMM,who manages the department,is responsible for several merchandise classifications
E)  It is managed by a general merchandise manager (GMM) F) A) and D)
G) None of the above

Exam 12: Managing the Merchandise Planning Process

________ categories consist of items whose sales fluctuate dramatically depending on the time of year.

Correct AnswerverifiedShow Answer

What is the first step in merchandise management planning?

Correct AnswerverifiedShow Answer

What information would a planner use to make an allocation decision?

Correct AnswerverifiedShow Answer

What is the difference between variety and assortment?

Correct AnswerverifiedVariety is the number of diffe...View AnswerShow Answer

After developing a plan and allocating the merchandise,the next step in the merchandise planning process involves _______.

Correct AnswerverifiedShow Answer

Which of the following statements does NOT describe the approach which deals with cycle (base) stock?

Correct AnswerverifiedShow Answer

Assortment is breadth of a retailer's merchandise and the number of different merchandising categories within a store or department.

Correct AnswerverifiedShow Answer

Which of the following does NOT describe the department in the merchandise classification scheme?

Correct AnswerverifiedShow Answer

Why can a vendor in a better position to manage a category than a smaller retailer?

Correct AnswerverifiedShow Answer

The largest classification level in the buying organization is the category.

Correct AnswerverifiedShow Answer

________________ is the percentage of demand for a particular SKU that is satisfied.

Correct AnswerverifiedShow Answer

Which of the following is NOT a benefit to a high inventory turnover?

Correct AnswerverifiedShow Answer

The percentage of complete orders received from a vendor is called _____.

Correct AnswerverifiedShow Answer

An assortment plan is a list of the SKUs that a retailer will offer in a merchandise category and thus reflects the variety and assortment that the retailer plans to offer in a merchandise category.

Correct AnswerverifiedShow Answer

In staple merchandise management systems,orders are generated by a computer system and transmitted directly to vendors using EDI,so why would a buyer or inventory planner be necessary?

Correct AnswerverifiedShow Answer

Seasonal merchandise consists of items whose sales fluctuate dramatically depending on the time of the year.

Correct AnswerverifiedShow Answer

Which of the following does NOT describe fashion merchandise categories?

Correct AnswerverifiedShow Answer

Certain advantages are inherent in rapid inventory turnover.List at least four of these advantages.

Correct AnswerverifiedThe advantages are (1)increased sales vo...View AnswerShow Answer

Which of the following statements does NOT describe the relationship between product availability and stock level?

Correct AnswerverifiedShow Answer

A vendor analysis that uses a weighted average to evaluate vendors is a ____.

Correct AnswerverifiedShow Answer

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Variety is the number of diffe...
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The advantages are (1)increased sales vo...
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