PGA PGM Level 2 -
Merchandise and Inventory
Management EXAM
QUESTIONS AND VERIFIED
CORRECT ANSWERS
GRADED A+ [LATEST] 100%
GUARANTEED PASS
Why must golf professionals forecast beginning of month inventory (BOMI) levels? - CORRECT
ANSWER-To account for the merchandise that is already physically present and ready to be sold
at the facility to avoid overbuying and carrying too much inventory
What is the likely result of a high turnover rate? - CORRECT ANSWER-More sales, less inventory,
better cash flow
What is a result of a low turn rate in the golf merchandising operation? - CORRECT ANSWER-
More markdowns to clear out stale merchandise
If your average inventory value is $37,000 and your annual cost of goods sold is $114,000, what
is the turnover rate? - CORRECT ANSWER-Turnover - 3.08
Which merchandising condition is most directly correlated with a high turn rate? - CORRECT
ANSWER-Low inventory
, Given the following information, what was the turnover rate for the year? Sales-$196,000
COGS-$140,000 Average Inventory-$56,000 Glove Sales-$24,000 Ball Sales-$36,000 Men's Shirt
Sales-$54,000 Rounds-20,000 - CORRECT ANSWER-Turnover-2.5(COGS/Average Inventory)=Turn
Rate
Some OTB funds should be reserved for unforeseen opportunities. - CORRECT ANSWER-True,
yes, the extra funds can be used for unforeseen opportunities
Based on the information below, what is the open-to-buy amount for July? JULY-Sales
$17,000/COGS $12,000/BOMI $50,000 AUGUST-Sales $12,500/COGS $9,000/BOMI $41,000 -
CORRECT ANSWER-$3,000(EOMI(BOMI for August)+COGS for July-BOMI for July) = OTB,
therefore $41,000+$12,000-$50,000= $3,000
What is the formula to determine monthly OTB dollars? - CORRECT ANSWER-Planned Open-to-
Buy - Inventory-on-Order
In an open-to-buy budget, how is average inventory defined? - CORRECT ANSWER-Average
Amount that must be on hand throughout the year, not a set monthly figure
What is the formula for calculating planned OTB? - CORRECT ANSWER-EOMI+COGS-BOMI=POTB
What does an open-to-buy reserve provide? - CORRECT ANSWER-Opportunities for incremental
buys, testing new products, small orders, etc.
Based on the following numbers, what is the planned OTB for the month of June with $1,000
previously ordered? MAY-Sales $18,000/COGS $12,000/BOMI $40,000/OTB $22,000 ;JUNE-Sales
$24,000/COGS $16,000/BOMI $50,000/OTB $ ? ;JULY-Sales $36,000/COGS $24,000/BOMI
$36,000 - CORRECT ANSWER-$36,000+$16,000-$50,000=$2,000 Planned OTB. Actual OTB is
$1,000
Merchandise and Inventory
Management EXAM
QUESTIONS AND VERIFIED
CORRECT ANSWERS
GRADED A+ [LATEST] 100%
GUARANTEED PASS
Why must golf professionals forecast beginning of month inventory (BOMI) levels? - CORRECT
ANSWER-To account for the merchandise that is already physically present and ready to be sold
at the facility to avoid overbuying and carrying too much inventory
What is the likely result of a high turnover rate? - CORRECT ANSWER-More sales, less inventory,
better cash flow
What is a result of a low turn rate in the golf merchandising operation? - CORRECT ANSWER-
More markdowns to clear out stale merchandise
If your average inventory value is $37,000 and your annual cost of goods sold is $114,000, what
is the turnover rate? - CORRECT ANSWER-Turnover - 3.08
Which merchandising condition is most directly correlated with a high turn rate? - CORRECT
ANSWER-Low inventory
, Given the following information, what was the turnover rate for the year? Sales-$196,000
COGS-$140,000 Average Inventory-$56,000 Glove Sales-$24,000 Ball Sales-$36,000 Men's Shirt
Sales-$54,000 Rounds-20,000 - CORRECT ANSWER-Turnover-2.5(COGS/Average Inventory)=Turn
Rate
Some OTB funds should be reserved for unforeseen opportunities. - CORRECT ANSWER-True,
yes, the extra funds can be used for unforeseen opportunities
Based on the information below, what is the open-to-buy amount for July? JULY-Sales
$17,000/COGS $12,000/BOMI $50,000 AUGUST-Sales $12,500/COGS $9,000/BOMI $41,000 -
CORRECT ANSWER-$3,000(EOMI(BOMI for August)+COGS for July-BOMI for July) = OTB,
therefore $41,000+$12,000-$50,000= $3,000
What is the formula to determine monthly OTB dollars? - CORRECT ANSWER-Planned Open-to-
Buy - Inventory-on-Order
In an open-to-buy budget, how is average inventory defined? - CORRECT ANSWER-Average
Amount that must be on hand throughout the year, not a set monthly figure
What is the formula for calculating planned OTB? - CORRECT ANSWER-EOMI+COGS-BOMI=POTB
What does an open-to-buy reserve provide? - CORRECT ANSWER-Opportunities for incremental
buys, testing new products, small orders, etc.
Based on the following numbers, what is the planned OTB for the month of June with $1,000
previously ordered? MAY-Sales $18,000/COGS $12,000/BOMI $40,000/OTB $22,000 ;JUNE-Sales
$24,000/COGS $16,000/BOMI $50,000/OTB $ ? ;JULY-Sales $36,000/COGS $24,000/BOMI
$36,000 - CORRECT ANSWER-$36,000+$16,000-$50,000=$2,000 Planned OTB. Actual OTB is
$1,000
