ch - ch. 7 cont. Forecast sales Challenging and attainable...

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ch. 7 cont. 17:42 Forecast sales Challenging and attainable  Too high-can not be attained Expensive-to sales ratio will be too high Profits fall  Too low Not enough inventory  Sales loss  Unhappy customers Loss of loyal customers  Forecasting—planning inventory levels Merchandise in stock must be sufficient  To meet sales expectations  Cushion-unanticipated demand Most often used approach: Stock-to-sales ratio  Also referred/offset to inventory turn over  Formula  Stock-sales ratio= values of stock/actual sales the stock-sales ratio is the used to calculate planned BOM stock 
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Formula Planned BOM= stock-sales ratio x planned sales  Stock-to-sales ratio Specifies the amount of inventory (in retail dollars) that should be on hand at the  beginning of the month to support the sales forecast and maintain the inventory turnover  objective for the category What does it mean if a retailer has a stock-to-sales ratio of 2 2 months  Retails often used a related measure, weeks of inventory What about a stock-to-sales ratio of ½  2 weeks  prepare for 2 weeks of inventory  determining stock turnover stock turnover rate measure of how accurately you balance sales to inventory levels determining how fast merchandise is sold, replenished and sold number of times the average stock is sold during a given period stock turnover rate= sales/average stock  problem illustration  totally inventory: 180000 average inventory  180000/13= 13846 stock turnover 60000/13846= 4.2
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ch. 8 17:42 merchandising management
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ch. 8 17:42 successful buyers are measured by how well they plan and control the amount of money 
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ch - ch. 7 cont. Forecast sales Challenging and attainable...

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