FM 206 FINAL EXAM QUESTIONS WITH CORRECT ANSWERS LATEST UPDATE 2026

FM 206 FINAL EXAM QUESTIONS WITH CORRECT ANSWERS LATEST UPDATE 2026 Assortment Planning - Answers involves determining the specific quantities and characteristics of each product that you will be purchasing in relation to specific factors such as brands, colors, sizes, and materials seasonal basics - Answers products desired by customers only during certain times of the year Generic Brands - Answers usually unbranded items in plain packages that receive secondary shelf locations and obtain little or no advertising support. Product Line - Answers a broad category of products having similar characteristics and similar uses Breadth - Answers relates to the number of product lines carried or the number of brands carried within a product classification Depth - Answers The number of choices offered customers within each brand or product classification Balanced Assortment - Answers when the breadth and depth meet the demands of your customers Cannibalization - Answers when potential sales of existing products are lost to new items selection factors - Answers product characteristics most important to your customers as they make their purchasing decisions (1) brand, (2) price, (3) size, (4) color, and (5) material model stock - Answers the desired assortment of stock broken down according to factors important to your target market, such as brand, price, material, color, and size inventory control systems - Answers Involves the maintenance of stock levels in relation to changing consumer demand shrinkage - Answers merchandise shortages perpetual control system - Answers recording business transactions such as sales, purchases, returns, and transfers on a continuous basis periodic control system - Answers take physical inventory on a regular basis, which involves the actual counting and recording of information about the merchandise on hand at a specific time exception reports - Answers show areas where sales or stock levels do not meet predetermined levels dollar control - Answers comparing the planned value of stock on hand with the value of stock on hand cost methods - Answers requires that inventory records be maintained using cost figures—exactly what the retailer paid for the merchandise retail method - Answers values the inventory using the current retail price Markdown - Answers the reduction in the retail price of merchandise already in stock, is the key price change that must be recorded Markdown cancellation - Answers usually occur when the retail price of merchandise has been reduced only temporarily for promotional purposes GMROI - Answers measures the profitability of a retailer's sales Quick Response (QR) - Answers an inventory management system used in retailing; merchandise is received just in time for sale when the customer wants it model stocks - Answers based on the ideal number of any item that should be on hand Electronic Data Interchange (EDI) - Answers the computer-to-computer exchange of business documents from a retailer to a vendor and back RFID - Answers System of tags which contain data that can be read from a distance using radio waves. vendors - Answers sources of supply wholesaler/merchant middleman - Answers is an organization that purchases merchandise from a manufacturer in large quantities and resells the goods in smaller amounts to retailers Manufactuer's representative - Answers act as an agent for the manufacturer. do not take possession of the merchandise before selling it to the retailer Rack jobbers - Answers A vendor who services client stores themselves Retail stores that use rack jobbers assign them rack or shelf space that they are responsible for keeping stocked with quick-turning merchandise exclusive distribution - Answers practice of some vendors whereby they sell the product to only one retailer in a trading area selective distribution - Answers they sell the product to one or more selected retailers in the same trading area vendor diary - Answers brief summaries of your dealings with each vendor with whom you do business central market - Answers city where a large number of key suppliers are located negotiation - Answers process that involves gathering and using information to your advantage intermediaries - Answers Middleman business involved in sales transactions that move products from the manufacturer to the final user. commissionaires - Answers foreign buying offices operate in foreign markets and function similarly to domestic buying offices importers - Answers -businesses who bring goods in from another country - Importers may be able to qualify for quantity discounts and pass the savings along to the buyer duty/tariff - Answers taxes to lower the number of imports by making them cost more than goods produced domestically quota - Answers predetermined amount of merchandise that a country's government allows to be imported for a specific product category