Retail Operation Notes
Buying/Handling 1. Merchandise planning 2. Merchandise control-OTB 3. Inventory planning 4. Managing Inventory 5. Vendor Selection 6. Vendor Negotiations 7. Merchandise Handling
Dollar Merchandise Planning (314) * (up arrow) inventory cs (down arrow) inventory * Inventory=largest retail investment * Buyers responsible for a planning of merchandise requirements * Analyze inventory performance with: * Gross Margin return on inventory(GMROI): Gross margin divided by average inventory at cost; alternatively, it is the gross margin percent multiplied by net sales. * (gross margin/net sales) x (net sales/average inventory at cost=(gross margin/average inventory at cost) * Step 1: Determine planned sales/period * Use 1 of 4 methods to plan # invested in stock
-Basic Stock method(BSM): (317)_______________-when you have a real low inventory turnover; sales are high and low * Average monthly sales for the season=Total planned sales for the season/number of months in the season * Average stock for the season=(Total planned sales for the season / Inventory turnover) * Inventory Turnover=estimated inventory-turnover rate for the season * Basic Stock=Average stock-Average Monthly Sales * BOM at retail=Basic Stock+planned monthly sales
-Percent-Variation Method (PVM) (318) * BOM stock=Average stock for season x ½ [1+(Planneed sales for the month/average monthly sales)]
-Week’s Supply Method(WSM) (319) * Plan inventory weekly, not by month; Sales don’t fluctuate * Number of weeks to be stocked=number of weeks in the period/stock turnover rate for the period * Average weekly sales=Estimated
-Stock-to-sales method (SSM) (319)
TTL=total
Dollar Merchandise Control-OTB(320)
* OTB=Merchandise needed-merchandise available * Merchandise needed=Planned EOM inventory + planned sales + planned markdowns * Merchandise available = open inventory + on order *
Dollar Merchandise Planning (314) * (up arrow) inventory cs (down arrow) inventory * Inventory=largest retail investment * Buyers responsible for a planning of merchandise requirements * Analyze inventory performance with: * Gross Margin return on inventory(GMROI): Gross margin divided by average inventory at cost; alternatively, it is the gross margin percent multiplied by net sales. * (gross margin/net sales) x (net sales/average inventory at cost=(gross margin/average inventory at cost) * Step 1: Determine planned sales/period * Use 1 of 4 methods to plan # invested in stock
-Basic Stock method(BSM): (317)_______________-when you have a real low inventory turnover; sales are high and low * Average monthly sales for the season=Total planned sales for the season/number of months in the season * Average stock for the season=(Total planned sales for the season / Inventory turnover) * Inventory Turnover=estimated inventory-turnover rate for the season * Basic Stock=Average stock-Average Monthly Sales * BOM at retail=Basic Stock+planned monthly sales
-Percent-Variation Method (PVM) (318) * BOM stock=Average stock for season x ½ [1+(Planneed sales for the month/average monthly sales)]
-Week’s Supply Method(WSM) (319) * Plan inventory weekly, not by month; Sales don’t fluctuate * Number of weeks to be stocked=number of weeks in the period/stock turnover rate for the period * Average weekly sales=Estimated
-Stock-to-sales method (SSM) (319)
TTL=total
Dollar Merchandise Control-OTB(320)
* OTB=Merchandise needed-merchandise available * Merchandise needed=Planned EOM inventory + planned sales + planned markdowns * Merchandise available = open inventory + on order *