6591283 six month merchandise plan1

8/3/2019 6591283 Six Month Merchandise Plan1

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Six Month Merchandise Plan

One of the most difficult tasks facing the retail

merchandiser is determining what to carry. Careful

planning is necessary if the retailer is to carry theright stock in the right quantities. Thus planning

is of great importance in merchandising goods to

achieve a profit. To a great; extent, the success orfailure of the merchandising division is dependent

on the degree and quality of the planning that takes

place.


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Planning Sales

Actual planning begins with sales.

Sales are planned on net basis (gross sales

customer returns).

Retailer must be aware of factors affecting the

customers ability and motivation to buy.

Shifts in customer demand occur for a vareity

of reasons.


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Planning Sales

1. Obtain sales from last year for each monthof the plan.

2. Determine projected sales volume foreach month in the plan. Consider factorscompetition, review past sales history andcurrent trends.

3. Figure % increase or decrease of plannedsales over last years sales.


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Planning Sales

% Sales increase or decrease =

this year planned saleslast year actual sales

------------------------------------------------------- x 100

last year actual sales


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Planning Stocks

The buyer determines the amt of stock needed at thebeginning of each month(BOM) in order to to meet

the planned sales figures. Retailer use a variety of methods to plan stock in

order to provide a balanced inventory in relation toestimated sales.

1. The basic stock method

2. Stocksales ratio method


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The Basic Stock Method

Basic stock is defined as the the minimum stock thatshould be maintained.

The BOM stock be sufficient to cover the sales forthat month and allow for a reserve of the basic stock.

There should be a basic inventory on hand that

remains constant regardless of the rate of sale. Thestock to be carried at the beginning of the month isdetermined by adding value of basic stock toplanned sales


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BOM Stock = Planned sales + Basic stock Basic Stock = Average StockAverage Monthly

Sales

Average stock = Planned sales for the season--------------------------------------

Stock turn for season

Average Monthly Sales = Planned sales for the season

---------------------------------------

No of months in the season


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Example

A dept has a planned stock turnover of 4

and planned sales of 160000 for a sixmonth season. Plan BOM stock for April if

planned sales for April are $20000?

l i


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Solutiona) Average stock for season = sales for the season

----------------------- = 160000/4 = $ 40000

stock turn for the seasonb) Average monthly sales = sales for season

--------------------------- = 160000/6 = $ 26667

no of months in the season

c) Basic stock = Average stockAverage monthly sales= 4000026667

= 13333

d) BOM stock = sales for the month + basic stock = 20000 + 13333

= $33333


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Stock-Sales Ratio

BOM stock = Planned Monthly Sales x Stock-Sales

Ratio

Stock-Sales Ratio = BOM Stock

------------------------

Net sales for the month


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Stock-Sales Ratio

Examples

Determine the stock-sales ratio when BOM stock

at retail is $50000 and retail sales for the monthare $35000?

The girls dept had planned sales of $60000 for themonth of April. Past records indicate a stock-sales ratio of 5.4. What should be planned BOMstock for month of April?


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SIX MONTH MERCHANDISE PLAN Plan Actual

% initial markup

% reductions

Department Name________________ % maintained markup

% alteration expenses

Department Number _______________ % cash discount

% gross margin

Merchandise Manager _______________ % operating expenses

% net profit

Buyer___________________________ season turnover

average stock

Period___________________________ basic stock

SPRING FEB MARCH APRIL MAY JUNE JULY SEASON

FALL AUG SEP OCT NOV DEC JAN TOTALS

SALES Last year

Plan

Plan % of season

Revised Plan

Actual

EOM STOCK Last yearPlan

Revised

Actual

MARKDOWNS Last year

Plan

Revised

Actual

% of Plan MD

BOM STOCK Last year

Plan

Revised

Actual

Planned Purchases Last year

at Retail Plan

Revised

Actual


at Cost Plan

Revised

Actual


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First fill all information given in the sum 8.5-1

Planned sales - $650000

Reductions 22% of sales = 22% x 650000 = 143000 Seasons turnover =1.9

Operating expenses 34.0%

Profit desired 7.5% Alteration costs 0.5%

Cash discounts 1.6%


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% initial markup

% reductions 22.00%


% alteration expenses 0.50%

Department Number _______________ % cash discount 1.60%

% gross margin

Merchandise Manager _______________ % operating expenses 34.00%

% net profitBuyer___________________________ season turnover 1.9

average stock




SALES Last year

Plan 650000

Plan % of season

Revised Plan

Actual

EOM STOCK Last year

Plan

Revised

Actual

MARKDOWNS Last year

Plan

Revised

Actual

% of Plan MD

BOM STOCK Last yearPlan

Revised

Actual


at Retail Plan

Revised

Actual


at Cost Plan

Revised

Actual


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Write the % of planned sales % in the sales column - planed $ of season row

Feb 15.5 March 17.5 April 19.0 May 18.0

June 15.5 July 14.5

Write the % of planned reductions in the markdown column

%of plan MD- row Feb 15 March 12

April 19 May 16

June 18 July 20


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% initial markup

% reductions 22.00%




% gross margin


% net profitBuyer___________________________ season turnover 1.9

average stock




SALES Last year

Plan 650000

Plan % of season 15.5 17.5 19 18 15.5 14.5

Revised Plan

Actual

EOM STOCK Last year

Plan

Revised

Actual

MARKDOWNS Last year

Plan

Revised

Actual

% of Plan MD 15 12 19 16 18 20


Revised

Actual


at Retail Plan

Revised

Actual


at Cost Plan

Revised

Actual


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Distribute monthly planned sales.

= % of seasons sales x Net sales

Feb = 15.5% x 650000 = 100750March = 17.5% x 650000 = 113750

April = 19.0% x 650000 = 123500

May = 18.0% x 650000 = 117000

June = 15.5% x 650000 = 100750

July = 14.5% x 650000 = 94250

-----------------

Planned sales 650000


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Six Month Merchandise Plan Distribute monthly planned reductions.

= % of reductions x Net sales

=22% x 650000 = 143000

Feb = 15% x 143000 = 21450March = 12% x 143000 = 17160

April = 19% x 143000 = 27170

May = 16% x 143000 = 22880

June = 18% x 143000 = 25740

July = 20% x 143000 = 28600

-----------------

Planned reductions 143000


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% initial markup

% reductions 22.00%




% gross margin


% net profit

Buyer___________________________ season turnover 1.9

average stock




SALES Last year

Plan 100750 113750 123500 117000 100750 94250 650000

Plan % of season 15.5 17.5 19 18 15.5 14.5

Revised Plan

Actual

EOM STOCK Last year

Plan

Revised

Actual

MARKDOWNS Last year

Plan 21450 17160 27170 22880 25740 28600 143000

Revised

Actual

% of Plan MD 15 12 19 16 18 20


Revised

Actual


at Retail Plan

Revised

Actual


at Cost Plan

Revised

Actual


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Six Month Merchandise Plan Determine BOM stock figures:

a) Basic stock = Average InventoryAverageMonthly Sales

= Planned sales - planned sales

------------------ -------------------

stock turnover no of months= 650000 - 650000

------------- ----------

1.9 6= 342105.26108333.33

= 233771.93

= 233772


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Six Month Merchandise Planb) BOM stock = Planned monthly sales +

Basic stock

Feb = 100750 + 233772 = 334522

March = 113750 + 233772 = 347522

April = 123500 + 233772 = 357272

May = 117000 + 233772 = 350772

June = 100750 + 233772 = 334522

July = 94250 + 233772 = 328022-----------------

Total Planned BOM 2052632


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% initial markup 51.15%

% reductions 22.00%




% gross margin 41.50%


% net profit 7.50%


average stock

Period___________________________ basic stock 233772



SALES Last year

Plan 100750 113750 123500 117000 100750 94250 6500

Plan % of season 15.5 17.5 19 18 15.5 14.5

Revised Plan

Actual

EOM STOCK Last year

Plan

Revised

Actual

MARKDOWNS Last year

Plan 21450 17160 27170 22880 25740 28600 1430

Revised

Actual

% of Plan MD 15 12 19 16 18 20BOM STOCK Last year

Plan 334522 347522 357272 350772 334522 328022 20526

Revised

Actual


at Retail Plan

Revised

Actual


at Cost PlanRevised

Actual

Si h h di l


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Six Month Merchandise Plan End of month EOM = Beginning inventory of next

month

July EOM inv = calculate average BOM

-----------------------no of months

OR

average inv = Sales = 650000 = 342105

--------- ---------

Turnover 1.9



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% reductions 22.00%






% net profit 7.50%


average stock




SALES Last year

Plan 100750 113750 123500 117000 100750 94250 650000

Plan % of season 15.5 17.5 19 18 15.5 14.5

Revised Plan

Actual

EOM STOCK Last year

Plan 347522 357272 350772 334522 328022 342105*

Revised

Actual

MARKDOWNS Last year

Plan 21450 17160 27170 22880 25740 28600 143000

Revised

Actual

% of Plan MD 15 12 19 16 18 20

BOM STOCK Last year

Plan 334522 347522 357272 350772 334522 328022 2052632

Revised

Actual


at Retail Plan

Revised

Actual


at Cost Plan

Revised

Actual


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% reductions 22.00%






% net profit 7.50%Buyer___________________________ season turnover 1.9

average stock




SALES Last year

Plan 100750 113750 123500 117000 100750 94250 650000

Plan % of season 15.5 17.5 19 18 15.5 14.5

Revised PlanActual

EOM STOCK Last year

Plan 347522 357272 350772 334522 328022 342105*

Revised

Actual

MARKDOWNS Last year

Plan 21450 17160 27170 22880 25740 28600 143000

Revised

Actual

% of Plan MD 15 12 19 16 18 20

BOM STOCK Last year

Plan 334522 347522 357272 350772 334522 328022 2052632

Revised

Actual


at Retail Plan 135200 140660 144170 123630 119990 136933 800583

Revised

Actual


at Cost Plan

RevisedActual

Si M h M h di Pl


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Six Month Merchandise Plan Planned Purchase at Cost =

Gross Margin% = Profit % + Expense %

= 7.5 % + 34.0 %= 41.5 %

Cost % = (100 % - 41.5%) = 58.5%

Planned Purchase at Cost = Planned purchase at

retail x (58.5%)Feb = 135200 x 58.5% = 79092

March = 140660 x 58.5% = 82286

April = 144170 x 58.5% = 84339

May = 123630 x 58.5% = 72324June = 119990 x 58.5% = 70194

July = 136933 x 58.5% = 80106

-------------

Total Purchase at Cost = 468341


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% reductions 22.00%






% net profit 7.50%


average stock




SALES Last year

Plan 100750 113750 123500 117000 100750 94250 650000

Plan % of season 15.5 17.5 19 18 15.5 14.5

Revised PlanActual

EOM STOCK Last year

Plan 347522 357272 350772 334522 328022 342105*

Revised

Actual

MARKDOWNS Last year

Plan 21450 17160 27170 22880 25740 28600 143000

Revised

Actual

% of Plan MD 15 12 19 16 18 20

BOM STOCK Last year

Plan 334522 347522 357272 350772 334522 328022 2052632

Revised

Actual


at Retail Plan 135200 140660 144170 123630 119990 136933 800583

Revised

Actual


at Cost Plan 79092 82286 84339 72324 70194 80106 468341

Revised

A t l

6591283 six month merchandise plan1

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