Editors Note:
After spending time in prayer to the Lord Jesus to help me study for the
exam, I have prepared my own sample exam multiple choice questions in anticipation of the real exam. I wanted to share
them with you all on this site to help you study if you think it would
be helpful. If you do not know the answers, I would go over those pages
from the textbook..
I do
not know if the real exam will be easier than the one I prepared to help
me study or if it will be harder. I did write 54 multiple choice questions and
based on the notes and textbook for the 4 chapters. These
questions do not cover all the material in the notes or textbook but are
a good way to study.
I would approach the
multiple choice questions as fill in the blanks first. If you don’t know
the answer, then look at the choices and try to figure out the answer.
Have your notes and textbook ready! I do hope it helps you all to study!
Take this sample
exam in test conditions and see how well you will do and where you need
to brush up on! There are almost 33 pages of content that will help you
be ready for the exam for chapters 9, 10, 12, & 13! May the Lord bless
you and guide you! Amen!
Most
questions are from chapters 12 & 13. I hope you all receive it before
the exam. Even if you receive it 15 min before the exam, you can go over
the answer key to review for the exam.
Click here for Answer Key Version
1
Chap 12: 1, page 371
GMROI is
- Gross Margin Return On
Investment
- Gross Margin Retail Of
Inventory
-
Gross Margin Return On Inventory
- Gross Margin Retail On
Investment
- None of the Above
2
Chapter 13: 1, page 403
Retailers use two types of buying systems known as
- Staple merchandise buying
system for basics
- A merchandise budget for
fashion merchandise
- Staple merchandise buying
system for fashion
-
Both A & B
- All of the Above
3
Ch 10: 1, page 310
The integration of business processes from end user
through original suppliers that provides products, services, and
information that add value to customers is
Supply Chain Management
Demand Chain Management
Category Chain Management
Assortment Chain Management
None
of the Above
4
Ch 9: 1, page 274
The strategic objective of human resource
management is to
- Align the capabilities and
behaviors of employers with the short-term and long-term goals of
the retail firm.
- Align the capabilities and
behaviors of customers with the short-term and long-term goals of
the retail firm.
-
Align the capabilities and behaviors of employees
with the short-term and long-term goals of the retail firm.
- Align the capabilities and
behaviors of management with the short-term and long-term goals of
the retail firm.
- None of the Above
5
Chapter 12: 24, page 374
All of the following are advantages of High
Inventory Turnover except
-
Increased Cost of Goods Sold
- Increased Sales Volume
- Increased Money for Market
Opportunities
- Increased Salesperson morale
- Increased Asset Turnover
6
Chapter 13: 3, page 403
Keeps track of the merchandise flows while they are
occurring so buyers don’t spend too much or too little
- Category system
- Assortment Plan
- Category Management
- Merchandise Management
-
Open-to-Buy system
7
Ch 10: 3, page 314
Purchase data collected at the point of sale goes
into a huge database known as
A.
POS
B.
PDA
C.
Data Warehouse
D.
EDI
E.
None of the Above
8
Ch 9: 2, page 274
Employee productivity is
-
The retailer’s sales or profit divided by the number
of employees.
- The retailer’s sales or profit
multiplied by the number of employees.
- The retailer’s sales or profit
added by the number of employees.
- The retailer’s sales or profit
subtracted by the number of employees.
- None of the Above
9
Chapter 12: 25, page 390
The number of different merchandising categories
within a store or department is called
- Assortment
- Categories
- Depth
-
Breadth
- None of the Above
10
Chapter 13: 6, see your notes
Inventory used to guard retailer when vendor does
not get merchandise to you on time
- Cycle Stock
- Base Stock
-
Buffer Stock
- Value Stock
- In House Stock
11
Ch 10: 5, page 311
The 80-20 rule states
A.
80% of loss comes from 20% of your customers
B.
80% of profit comes from 20% of your customers
C.
80% of profit comes from 20% of your vendors
D.
20% of profit comes from 80% of your customers
E.
Both B & D
12
Ch 9: 5, page 278
Identifies the activities to be performed by
specific employees and determines the lines of authority and
responsibility in the firm
- Specialization
- Centralization
- Decentralization
-
Organization Structure
- Organization Chart
13
Chapter 12: 26, page 391
The number of SKU’s within a category is called
- Variety
- Assortment
- Breadth
- Depth
-
B & D
14
Ch 13: 8, 408
Inventory whose sales fluctuate dramatically
according to the time of year
- Category merchandise
-
Seasonality merchandise
- Fad merchandise
- Staple merchandise
- Deseasonalized
merchandise
15
Ch 10: 7, page 315
The computer-to-computer exchange of business
documents from retailer to vendor, and back. In addition to sales data,
purchase orders, invoices, and data about returned merchandise are
transmitted from retailer to vendor
A.
Electronic Data Interchange
B.
Electronic Data Exchange
C.
Exchange Date Interchange
D.
Data Electronic Interchange
E.
Data Warehouse Exchange
16
Ch 9: 8, see notes
When you delegate responsibility, you have to
delegate ________ to go with it.
- Tasks
-
Authority
- Work
- Specialization
- Centralization
17
Chapter 12: 29, page 391
Product availability is the
- Percentage of supply for a
particular category that is satisfied.
- Percentage of supply for a
particular SKU that is satisfied.
- Percentage of demand for a
particular category that is satisfied.
-
Percentage of demand for a particular SKU that is
satisfied.
- None of the Above
18
Ch 13: 10, 408
The order point is the
-
Amount of inventory below which the quantity
available shouldn’t go or the item will be out of stock before the
next order arrives.
- Amount of inventory below which
the quantity available should reach or the item will be out of stock
before the next order arrives.
- Amount of inventory above which
the quantity available shouldn’t go or the item will be out of stock
before the next order arrives.
- Amount of inventory above which
the quantity available shouldn’t go or the item will be out of stock
before the next order arrives.
- None of the Above
19
Ch 10: 8, page 319
The part of the supply chain process that plans,
implements, and controls the efficient, effective flow and storage of
goods, services, and related information from the point of origin to the
point of consumption in order to meet customers’ requirements.
A.
Data Warehouse
B.
Logistics
C.
EDI
D.
ROI
E.
GMROI
20
Ch 9: 9, page 280
Focus employees on a limited set of activities
which enables them to develop expertise and increase productivity is
- Centralization
- Decentralization
-
Specialization
- Empowerment
- None of the Above
21
Chapter 12: 33, page 397
An assortment plan describes in
- Specific terms what should be
carried in a particular SKU.
- General terms what should be
carried in a particular SKU.
- Specific terms what should be
carried in a particular merchandise category.
- Specific terms what should be
discontinued in a particular SKU
-
General terms what should be carried in a particular
merchandise category.
22
Ch 13: 12, page 408
Amount of time between recognition that an order
needs to be placed and when it arrives in the store and is ready for
sale
- Review Time
- Order Point
- Lead Point
-
Lead Time
- Review Point
23
Ch 10: 10, page 321, see notes
Merchandise comes in from one side of the warehouse
and loaded by trucks on other side to go to the store.
A.
Traditional Distribution Center
B.
Supply Distribution Center
C.
Crossdocking Distribution Center
D.
Logistics Distribution Center
E.
None of the Above
24
Ch 9: 13, see notes
The disadvantage of centralization is
Higher employee turnover
Cannot respond quickly to local market conditions
No
Empowerment
Cannot react to sudden change
All of the Above
25
Chap 12: 2, page 370-371
The financial ratio that is useful for planning and
measuring/evaluating merchandise performance is a return on investment
measure called
- ROI
- GROI
-
GMROI
- ROA
- PME
26
Ch 13: 18, page 411
Shrinkage is
- Inventory reduction that is
caused by shoplifting by employees or customers
- Merchandise being misplaced or
damaged
- Poor Bookkeeping
- Difference between what you
have and should have
-
All of the Above
27
Chapter 12: 39, page 363
The process by which a retailer attempts to offer
the right quantity of the right merchandise in the right place at the
right time while meeting the company’s financial goals is called
- Supple Chain Management
- Assortment Planning
- Category Management
-
Merchandise Management
- Category Planning
28
Ch 13: 20, page 415
Open to Buy system
Starts after merchandise is purchased using the merchandise budget plan
or staple merchandise system.
Keeps track of merchandise flow while they’re occurring specifically
they record how much is spent each month, and how much is left to spend.
Prevents merchandise from being delivered when it is not need.
Helps merchandise to be delivered when it is needed.
All of the Above
29
Chapter 12: 42, page 366
An assortment of items that the customer sees as
reasonable substitutes for each other is called
- Variety
- Assortment
-
Category
- Backup
- Buffer
30
Ch 13: 26, page 420
This analysis utilizes the general 80-20 principle
that implies that approximately 80 percent of a retailers sales or
profits come from 20 percent of the products
Multi-Attribute Analysis
ABC Analysis
Sell-through Analysis
Gross Margin Analysis
GMROI Analysis
31
Chap 12: 45, page 370
The smallest unit for making inventory control
decisions is called
-
SKU
- Category
- Assortment
- Classification
- Department
32
Ch 13: 28, page 423
In the Multiattribute method
Develop a list of issues to consider in evaluation
Importance weights for each issue should be determined by merchandise
manager
Make
Judgments about each brand’s performance on each issue
Mulitply the importance weight placed for each issue * the brand and add
brands up
All of the above
33
Chap 12: 46, page 366
A Category captain is a supplier who forms an
alliance with a retailer to
- Help gain customer insight
- Satisfy consumer needs
- Improve the performance
potential across the entire category
- Improve the profit potential
across the category
-
All of the Above
34
Ch 13: 14, page 408
Calculate the order point of Bibles with lead time
being 40 days, Review time of 7 days, Demand is 40 per day, and backup
stock is 40. Here the buyer orders if quantity available falls to
- 1920 units
- 1920 units or higher
-
Fewer than 1920 units
- 1600 units or fewer
- Both A & C
35
Chapter 12: 48, page 367
Potential problem with establishing a category
captain, however is that
- Vendors could take advantage of
their position by choosing to maximize their own sales at the
expense of its competition.
- Anti-trust considerations
- Collision with retailers to fix
prices
- Block other brands,
particularly smaller brands, from access to shelf-space
-
All of the Above
36
Ch 13: 17, page 408
Calculate how many Bibles to order when the
quantity available is less than the order point. The order point is
1800, Quantity at hand is 490, Quantity on order is 777.
- We have to order 1277
- We have to order 1267
-
We have to order 533
- We have to order 1310
- None of the Above
37
Chapter 12: 49, page 367
To avoid potential problems with the Justice
Department, a category captain should
- Divulge all information
obtained from the retailer to the other brands in the category
- Appoint another large brand as
a “category adviser” to oversee the captain’s decisions
- Not serve as captain for two
retailers in the same market to circumvent potential collusion in
price setting
- None of the Above
-
All of the Above
38
Ch 13: 24, page 417
The Actual BOM stock for Bibles is 59,500, the
monthly additions actual is 7,000, what is on order is 18,000 , Sales is
15,600, monthly reductions plan is 2, 310, the planned EOM stock is
68,640, so the projected EOM stock plan is
41,
500
52,
500
66, 590
57,
190
None
of the above
39
Chap 12: 9, Check your notes for formula
Calculate the GMROI for a Christian Bookstore that
has annual sales of $20,000 for T-Shirts, Gross Margin of 45%, and
Average Inventory (at cost) of $75,000.
- 14.67 %
- 8%
-
12%
- 10%
- None of the Above
40
Ch 13: 25 page 417
The Open-to-buy plan for Bibles is
41,500
57,190
2,050
2,310
None
of the above
41
Chap 12: 16, page 373 + Check your notes for
formula
Calculate the Inventory Turnover for a Christian
Bookstore that has annual sales of $20,000 for T-Shirts, Gross Margin of
45%, and Average Inventory (at cost) of $75,000.
-
.1467
- .0800
- .1200
- .1000
- None of the Above
42
Ch 13: 19, page 411
Schenley Cafeteria should have 4 boxes of cereal
which contain 96 cereals in each. When a physical inventory is done
after being put out on the sales floor but none of been sold, now there
are only 3 boxes left. The shrinkage that occurred is
- 384
- 192
- 288
-
96
- 278
43
Chapter 12: 31, page 391
You go into Christian Family store to buy a Bible
making you the 100th customer in there. Unfortunately, after
the 90th Bible, they run out of Bibles. Christian Family
store has a level of support of
- 100% because of their caring
customer service
- 10% because of their shortage
of Bibles
-
90% because of being able to have a supply of 90
- 0% for running out of Bibles
- None of the Above
44
Ch 13: 15, page 406
Quantity available is
- Quantity on hand – Quantity on
order
-
Quantity on hand + Quantity on order
- Quantity on order – Quantity on
hand
- Quantity on hand * Quantity on
order
- Quantity on hand / Quantity on
order
45
Chap 12: 19, Check your notes
A fictional store called Christian Family has a
Gross Margin of 45% , Cost of Goods sold at 11,000, calculate the net
sales
- 9,000
- 22,000
-
20,000
- 12,000
- 15,000
46
Chapter 12: 23, page 374
If you have Inventory Turnover on Christian CD’s to
be 7 times in 6 months, the IT expressed on an annual basis is
- 13
- 1.1
- 42
- 12
-
14
47
Ch 13: 21. page 417
For a month that is over,
The
Actual EOM stock = Projected BOM stock
The
Actual EOM stock = Planned EOM stock
The
Actual EOM stock = Projected EOM stock
The
Actual EOM stock = Planned BOM stock
The Actual EOM stock = 0
48
Chap 12: 6, page 371
Average Inventory in GMROI is measured at
-
Cost because a retailer’s investment in inventory is
the cost of the inventory.
- Cost because a retailer’s
investment in inventory is the retail of the inventory.
- Retail because a retailer’s
investment in inventory is the retail of the inventory.
- Retail because a retailer’s
investment in inventory is the cost of the inventory.
- None of the above
49
Ch 13: 22, page 417
This is equal to the inventory we have at the
beginning of the month plus what we buy minus what we get rid of through
sales or other inventory reductions
Planned EOM stock
Actual EOM stock
Projected EOM stock
Actual BOM stock
Planned BOM stock
50
Chap 12: 3, page 371
GMROI is a financial ratio that
- Measures how many gross margin
dollars are spent on every dollar of inventory investment.
-
Measures how many gross margin dollars are earned on
every dollar of inventory investment.
- Measures how many gross margin
dollars are earned on every 100 dollars of inventory investment at
retail
- Measures how many gross margin
dollars are earned on every 100 dollars of inventory investment at
cost
- None of the Above
51
Chapter 13: 2, page 403
All of the following are characteristics of staple
merchandise buying system
- Forecasting Demand is much more
straightforward
- There is an established sales
history for each SKU
- Standard statistical techniques
are used to forecast sales
- None of the Above
-
All of the Above
52
Chap 12: 8, page 372
GMROI that is
-
Higher is better for business
- Lower is better for business
- Higher is worse for business
- Lower is worse for business
- Both A & D
53
Chapter 12: 20, page 372
Bibles are delivered to a fictional store called
Family Christian. The faster this process takes place, the
- Lower the Inventory Turnover
- Lower the Inventory Backup
-
Higher the Inventory Turnover
- Higher the Inventory Backup
- None of the Above
54
Chapter 13: 4, page 404
Used for merchandise that follows a predictable
order-receipt-order cycle where most merchandise fits this criterion.
Utilized for buying most of the merchandise in food and discount stores
- Fashion merchandise buying
system
- Assortment Plan Buying System
- Category Management Buying
System
-
Staple merchandise buying system
- Supply Management Buying System
Express your view