Question 1

_____ refers to the number of merchandise brands that are found in a single merchandise line.

Accepted Answer

A)  Choice 
B)  Variety 
C)  Assortment 
D)  Breadth 
E)  Depth

Question 2

During negotiations between buyer and seller,price and discount terms are seldom negotiated,because they are set by the vendor and by law cannot be adjusted to individual buyers.

Accepted Answer

A) True 
 B)False

Question 3

The percentage variation method (PVM)of inventory planning assumes that the percentage fluctuations in monthly stock from average stock should be half as great as the percentage fluctuations in monthly sales from average sales.

Accepted Answer

A) True 
 B)False

Question 4

A(n)_____ occurs when retailers have their own products competing with the manufacturer's products for shelf space and control over display location.

Accepted Answer

A)  category conflict 
B)  inventory shortage 
C)  open-to-buy 
D)  battle of the brands 
E)  vendor analysis

Question 5

Which of the following factors is NOT a constraint on the retailer's optimal merchandise mix?

Accepted Answer

A)  The space available in a store 
B)  The buyer's experience with the current product line 
C)  The merchandise turnover rate 
D)  The way the target market behaves 
E)  The dollar investment available

Question 6

_____ occurs when an employee of one of the retailer's vendors steals merchandise as it is delivered to the retailer.

Accepted Answer

A)  Vendor collusion 
B)  Vendor theft 
C)  Shorting 
D)  Employee theft 
E)  Employee shortage

Question 7

The analysis,planning,acquisition,handling,and control of the merchandise investments of a retail operation is termed:

Accepted Answer

A)  inventory planning. 
B)  sales review/planning. 
C)  product ordering. 
D)  merchandise management. 
E)  merchandise acquisition.

Question 8

Explain how variety,breadth,and depth influence a retailer's merchandise mix.What factors constrain a retailer's optimal merchandise mix,and how can a retailer overcome these constraints?

Accepted Answer

The answer of Explain how variety,breadth,and depth influence a retailer's...

Question 9

To alleviate space constraints,some retailers become involved in:

Accepted Answer

A)  buying on consignment. 
B)  negotiating new building plans. 
C)  charging manufacturers slotting fees. 
D)  using extra dating on bills. 
E)  adding more shelf space.

Question 10

The basic stock method (BSM)of inventory planning is most useful when a retailer has a low turnover rate or when sales are erratic.

Accepted Answer

A) True 
 B)False

Question 11

A vendor profitability analysis statement:

Accepted Answer

A)  is a vendor's financial statement that is made available to all retailers. 
B)  is a schedule maintained by the retailer which shows each vendor's initial data for new lines, shipment of orders, and gross margins. 
C)  is a retailer's financial statement used by the vendor for determining available credit limits. 
D)  is a retailer's analysis of the profitability of the different vendors and their lines from the prior year(s). 
E)  breaks down vendors using an A-B-C classification based on the reliability of delivery from each vendor.

Question 12

Which of the following is PROBABLY NOT an important criterion to use when selecting a merchandise source?

Accepted Answer

A)  Distribution-center processing time 
B)  Consumers' perception of the manufacturer's reputation 
C)  Interest rates charged by your bank to finance this purchase 
D)  Reliability of delivery from the vendor 
E)  Where the product is manufactured

Question 13

_____ refers to the number of different lines the retailer stocks in the store.

Accepted Answer

A)  Variety 
B)  Assortment 
C)  Breadth 
D)  Depth 
E)  Merchandise mix

Question 14

If a merchandise line has a gross margin of 35 percent and sales per dollar of inventory investment of 4.0,what is its GMROI?

Accepted Answer

A)  $ 2.60 
B)  $ 1.40 
C)  $ 6.15 
D)  $11.43 
E)  $14.00

Question 15

Inventory planning based on the weeks' supply method would be most appropriate for a _____,where inventories are planned on a weekly basis and where sales do not fluctuate substantially.

Accepted Answer

A)  supermarket 
B)  furniture store 
C)  department store 
D)  sporting goods store 
E)  campus bookstore

Question 16

On the way to market for the first time,you continually think about the last thing your boss said to you: "You should always study vendors with the vendor profitability analysis statement and the confidential vendor analysis before meeting with any vendor." What are these,why are they important,and how would you use them?

Accepted Answer

The answer of On the way to market for the...

Question 17

_____ is a record of all purchases a retailer made last year,discounts granted by the vendors,transportation charges paid,the original markup,markdowns,and the season-ending gross margin on a vendor's merchandise.

Accepted Answer

A)  Vendor's financial history 
B)  Vendor profitability analysis statement 
C)  Vendor's blue book 
D)  Vendor report 
E)  Confidential vendor analysis

Question 18

Gross margin return on inventory (GMROI)equals:

Accepted Answer

A)  gross margin percentage / dollars invested in inventory at retail. 
B)  (gross margin / net sales) * (net sales / average inventory at cost). 
C)  gross margin percentage / inventory turnover rate. 
D)  net profit margin / markdown percentage. 
E)  (gross margin / net sales) * (net sales / average inventory at retail).

Question 19

Workers and shoppers must be informed when they are being monitored.

Accepted Answer

A) True 
 B)False

Question 20

When retailers believe that it is necessary to have a given level of inventory available at all times,they will likely use the _____ method for inventory management.

Accepted Answer

A)  basic trade 
B)  basic stock 
C)  weeks' supply 
D)  percentage-variation 
E)  stock-to-sales

Exam 9: Merchandise Buying and Handling

_____ refers to the number of merchandise brands that are found in a single merchandise line.

During negotiations between buyer and seller,price and discount terms are seldom negotiated,because they are set by the vendor and by law cannot be adjusted to individual buyers.

The percentage variation method (PVM)of inventory planning assumes that the percentage fluctuations in monthly stock from average stock should be half as great as the percentage fluctuations in monthly sales from average sales.

A(n) _____ occurs when retailers have their own products competing with the manufacturer's products for shelf space and control over display location.

Which of the following factors is NOT a constraint on the retailer's optimal merchandise mix?

_____ occurs when an employee of one of the retailer's vendors steals merchandise as it is delivered to the retailer.

The analysis,planning,acquisition,handling,and control of the merchandise investments of a retail operation is termed:

Explain how variety,breadth,and depth influence a retailer's merchandise mix.What factors constrain a retailer's optimal merchandise mix,and how can a retailer overcome these constraints?

To alleviate space constraints,some retailers become involved in:

The basic stock method (BSM)of inventory planning is most useful when a retailer has a low turnover rate or when sales are erratic.

A vendor profitability analysis statement:

Which of the following is PROBABLY NOT an important criterion to use when selecting a merchandise source?

_____ refers to the number of different lines the retailer stocks in the store.

If a merchandise line has a gross margin of 35 percent and sales per dollar of inventory investment of 4.0,what is its GMROI?

Inventory planning based on the weeks' supply method would be most appropriate for a _____,where inventories are planned on a weekly basis and where sales do not fluctuate substantially.

_____ is a record of all purchases a retailer made last year,discounts granted by the vendors,transportation charges paid,the original markup,markdowns,and the season-ending gross margin on a vendor's merchandise.

Gross margin return on inventory (GMROI) equals:

Workers and shoppers must be informed when they are being monitored.

When retailers believe that it is necessary to have a given level of inventory available at all times,they will likely use the _____ method for inventory management.