Question 1

In terms of merchandise,what is the difference between a classification and a category?

Accepted Answer

A classification is a group of items (SK...

Question 2

Allocating merchandise to stores is based upon all BUT the following decisions:

Accepted Answer

A)  how much merchandise to allocate to each store
B)  what type of merchandise to allocate
C)  when to allocate the merchandise to different stores
D)  where the merchandise was producedE) A) and B)
F) A) and C)

Question 3

Which of the following is NOT a factor that determines the level of required backup stock?

Accepted Answer

A)  the product availability the retailers wish to provide
B)  the more fluctuation in demand the more backup stock is needed
C)  lead time from the vendor
D)  fluctuations in lead time
E)  price of the productF) C) and E)
G) B) and E)

Question 4

A catalog retailer of kitchen items that sells aluminum muffin pans has found that some weeks it sells 40 pans,and other weeks it sells none.A reorder can take up to three weeks.The probability of running out of pans and alienating its customers can be alleviated by maintaining _______.

Accepted Answer

A)  non-ledgered stock
B)  cycle stock
C)  hidden inventory
D)  backup stock
E)  lead stockF) None of the above
G) A) and E)

Question 5

The purpose of an open-to-buy system is to ________.

Accepted Answer

A)  avoid seasonal buying
B)  maintain a steady average inventory
C)  record how much is spent each month and how much is left to spend
D)  decrease operating expenses
E)  develop monthly trends for sales forecastingF) B) and C)
G) C) and D)

Question 6

Which of the following statements about assortment is NOT true?

Accepted Answer

A)  The number of SKUs to offer in a merchandise category is strategic decision.
B)  The breadth and depth of the assortment in a merchandise category can affect the retailer's brand image.
C)  Consumers want to have unlimited choices in merchandise.
D)  Customers buy more if there are modest reductions of redundant items in assortments.
E)  Buyers need to consider the degree to which categories in a department complement each other.F) C) and E)
G) A) and E)

Question 7

Which of the following can be caused by a high inventory turnover?

Accepted Answer

A)  improved employee morale
B)  a decrease in the cost of goods sold
C)  an increase in promotions and markdowns
D)  more risk of product obsolescence
E)  a decrease in profitsF) A) and E)
G) B) and D)

Question 8

How can vendors be in a better position to manage a category than a retailer?

Accepted Answer

Vendors have superior information based ...

Question 9

The _____ is a method of rank-ordering SKUs based upon performance measures,to make inventory stocking decisions.

Accepted Answer

A)  product rating system
B)  sell-through analysis
C)  inventory turnover ranking
D)  GMROI
E)  ABC analysisF) B) and E)
G) A) and B)

Question 10

While in general,department stores manage merchandise at a category level,supermarkets organize their merchandise around brands or vendors.

Accepted Answer

A) True 
 B)False

Question 11

The ________ inventory system takes into account the outgoing sales and the incoming merchandise to indicate an accurate inventory at the end of each day.

Accepted Answer

A)  perpetual
B)  periodic
C)  on demand
D)  physical
E)  staticF) A) and B)
G) B) and C)

Question 12

When there is high inventory turnover,you can expect less of a risk for markdowns because ___________.

Accepted Answer

A)  price points had been set higher to accommodate for potential sales loss
B)  there merchandise does not stay in stores for long enough to be marked down
C)  buyers made poor assortment predictions
D)  consumers are wary of merchandise that sits on the shelves too long
E)  lower morale;associates will not want to take the markdownsF) C) and D)
G) B) and C)

Question 13

Father Christmas is a retail store in Georgia that sells one-of-a-kind Santas made from fur,wool,and tapestry.If 150 customers wish to buy Santas from this store,and it sells 120 before running out of stock,what is its service level?

Accepted Answer

A)  15 percent
B)  80 percent
C)  20 percent
D)  85 percent
E)  88 percentF) D) and E)
G) None of the above

Question 14

What is the record-keeping system that allows buyers to keep track of how much they purchased each month so they can keep their merchandise budget plan in line with actual purchases?

Accepted Answer

A)  aggregated budgeting
B)  fashion-oriented bookkeeping
C)  open-to-buy
D)  open stock buying
E)  trend buyingF) None of the above
G) B) and C)

Question 15

What can a retailer do to increase inventory turnover and what are the drawbacks to these approaches?

Accepted Answer

To increase inventory turnover,a retaile...

Question 16

Buyers,divisional merchandise managers,general merchandise managers are examples of some of those that undertake the responsibilities of merchandise management.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is NOT true about staple merchandise categories?

Accepted Answer

A)  They consist of items which are in continuous demand over an extended time period.
B)  The number of new product introductions in these categories is limited.
C)  The demand for these categories is predictable.
D)  Because their sales are relatively steady from day to day,periodic inventory system is used.
E)  Merchandise planning systems for these categories focus on continuous replenishment.F) C) and E)
G) B) and D)

Question 18

Which of the following consists of many SKUs without a sales history?

Accepted Answer

A)  fashion merchandise management system
B)  assortment driven management system
C)  historical precedence management system
D)  staple merchandise management system
E)  allocated space management systemF) A) and B)
G) C) and D)

Question 19

_____________ of a retailer's merchandise is the number of SKUs within a category.

Accepted Answer

A)  Merchandise breadth
B)  Horizontal integration
C)  Variety
D)  Assortment
E)  Merchandise mixtureF) B) and E)
G) B) and D)

Question 20

The 3-letter acronym "SKU" stands for __________.

Accepted Answer

A)  Stock Kept Universal
B)  Stock Keeping Unit
C)  Stock Keyboard Utility
D)  Stock Knowledge Union
E)  Stock Keystone UnderchargeF) C) and D)
G) A) and E)

Exam 12: Managing the Merchandise Planning Process

The _____ is a method of rank-ordering SKUs based upon performance measures,to make inventory stocking decisions.

Correct AnswerverifiedShow Answer

Which of the following is NOT true about staple merchandise categories?

Correct AnswerverifiedShow Answer

When there is high inventory turnover,you can expect less of a risk for markdowns because ___________.

Correct AnswerverifiedShow Answer

Buyers,divisional merchandise managers,general merchandise managers are examples of some of those that undertake the responsibilities of merchandise management.

Correct AnswerverifiedShow Answer

Father Christmas is a retail store in Georgia that sells one-of-a-kind Santas made from fur,wool,and tapestry.If 150 customers wish to buy Santas from this store,and it sells 120 before running out of stock,what is its service level?

Correct AnswerverifiedShow Answer

While in general,department stores manage merchandise at a category level,supermarkets organize their merchandise around brands or vendors.

Correct AnswerverifiedShow Answer

_____________ of a retailer's merchandise is the number of SKUs within a category.

Correct AnswerverifiedShow Answer

Which of the following is NOT a factor that determines the level of required backup stock?

Correct AnswerverifiedShow Answer

The purpose of an open-to-buy system is to ________.

Correct AnswerverifiedShow Answer

Which of the following can be caused by a high inventory turnover?

Correct AnswerverifiedShow Answer

What is the record-keeping system that allows buyers to keep track of how much they purchased each month so they can keep their merchandise budget plan in line with actual purchases?

Correct AnswerverifiedShow Answer

Which of the following consists of many SKUs without a sales history?

Correct AnswerverifiedShow Answer

How can vendors be in a better position to manage a category than a retailer?

Correct AnswerverifiedVendors have superior information based ...View AnswerShow Answer

In terms of merchandise,what is the difference between a classification and a category?

Correct AnswerverifiedA classification is a group of items (SK...View AnswerShow Answer

The 3-letter acronym "SKU" stands for __________.

Correct AnswerverifiedShow Answer

What can a retailer do to increase inventory turnover and what are the drawbacks to these approaches?

Correct AnswerverifiedTo increase inventory turnover,a retaile...View AnswerShow Answer

Allocating merchandise to stores is based upon all BUT the following decisions:

Correct AnswerverifiedShow Answer

A catalog retailer of kitchen items that sells aluminum muffin pans has found that some weeks it sells 40 pans,and other weeks it sells none.A reorder can take up to three weeks.The probability of running out of pans and alienating its customers can be alleviated by maintaining _______.

Correct AnswerverifiedShow Answer

The ________ inventory system takes into account the outgoing sales and the incoming merchandise to indicate an accurate inventory at the end of each day.

Correct AnswerverifiedShow Answer

Which of the following statements about assortment is NOT true?

Correct AnswerverifiedShow Answer

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Vendors have superior information based ...
View Answer

Correct Answer
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A classification is a group of items (SK...
View Answer

Correct Answer
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To increase inventory turnover,a retaile...
View Answer

Correct Answer
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