fashion, buying, promo exam 3

sales forecasting

involves predicting what consumers may do under a given set of conditions (demand, sales, and required inventory levels)

stock-to-sales ratio

(Value of stock / Actual sales); methods of inventory planning

retail analytics

the process of providing analytical data on information (such as inventory levels, supply chain movement, consumer demand, and sales)

stock turnover

rate is the number of times the average stock is sold during a given period and is calculated using the following formula: (Sales / Average stock)

bottom-up planning

the planned sales for the store are determined by adding together the planned sales figures that are developed by each department manager.

top-down planning

involves top-level management estimating total sales for the upcoming period. Then, expected sales are planned for each department according to its past contribution to the sales of the entire store.

six-month merchandising plan

regulates inventory levels in accordance with planned financial objectives; goal is to minimize the use of capital and maximize profits.

plan reductions

purchases at cost

represent the amount of money that the buyer expects to spend on merchandise purchases during a given period. (100% Initial markup %) × Planned purchases at retail)

purchases at retail

should be adequate to implement the six-month merchandise plan. On the merchandise plan, purchases must be planned at retail first because all the other figures are based on retail.

open to buy planning

the amount the buyer has left to spend for a period, and it is reduced each time a purchase is made.

BOM

Beginning of month inventory

EOM

End of month inventory

when are EOM and BOM the same?

when the end-of-month inventory switches to the beginning of the next month

specialty goods

ex. Women’s shoe store (specific products) 

cannibalization

occurs when potential sales of existing products are lost to new items.

private brand

more profitable, less expensive

balanced assortment of merchandise

occurs when the breadth and depth meet the demands of your customers.

RFID technology

(radio frequency identification) anti-shoplifting

LIFO

last in first out; does not likely occur

FIFO

First in last out

quick response

a strategy whereby retailers can forecast today what they will sell tomorrow and have the merchandise in the store on time and in the right quantities, colors, sizes, and styles

GMRY

Global Master Repurchase Agreement

stock breadth

the number of product lines carried or the number of brands carried within a product classification

stock depth

The number of choices offered to customers within each brand or product classification

primary data

information collected firsthand (surverys, interviews, etc.)

secondary data

obtains from existing sources. (newspapers, articles, journals, etc.)

3 components of plan reductions