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Purchasing

Purchasing. Lesson 2. Objectives. Explain how purchasing impacts sales and profits List qulities of a good buyer Describe the lifecycle of inventory through a store From ordering to sale Explain the affect of inventory control on sales

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Purchasing

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  1. Purchasing Lesson 2

  2. Objectives • Explain how purchasing impacts sales and profits • List qulities of a good buyer • Describe the lifecycle of inventory through a store • From ordering to sale • Explain the affect of inventory control on sales • Calculate stock turnover in terms of items and dollars • List common problems associated with purchasing and inventory control

  3. Purchasing • What a Buyer Does: • A person who is responsible for purchasing the merchandise for a store • Planning: • The buyer must plan which merchandise to buy • Important to know the store’s customers to be able to predict what they will want to buy • Timing: • Merchandise must be available when customers want to purchase • Negotiating: • Buyers negotiate the terms and discounts of the orders with vendors or suppliers

  4. Selecting Vendors: • Vendor: • Is a business from which a buyer purchases merchandise • Inventory Needs: • Inventory: • The total amount of goods a business has • Referred to as “Stock”

  5. Stock Handling: • Receiving and Checking in Stock: • When stock arrives the workers check the items against the invoice • Make sure what was ordered was received • Price Marking Stock: • After the stock is checked in it is marked with its selling price • Transferring Stock to the Selling Floor: • After the price is put on the stock is moved to the selling floor • Stock Storage: • Any stock that cannot fit on the shelf needs to be put in the appropriate storage

  6. Inventory Control: • It is important to control the inventory so that you do not have too much or too little amount of an item • Inventory Systems: • Physical Inventory System: • The system works by counting all the stock to be certain of the stock levels • Perpetual Inventory System: • This system works by keeping track of items that are received and sold to keep

  7. Stock Turnover: • Measures how often stock is sold during a given time period • Can be measured in items of stock or in dollars invested

  8. Key Math Concepts • Calculating Open-To-Buy • Open-to-buy= Planned Purchases – (Orders Received + Merchandise Ordered) • Example, You have planned purchases of $1,000, you have received orders that total $400 and you have ordered merchandise that totals $200. • Open-to-buy = $1000 – ($400 + $200) • Open-to-buy = $400

  9. Computing Stock Turnover: • Stock Turnover in Items = Number of Items Sold + Average Number of Stock Items in inventory • Stock Turnover in Dollars = Dollar Sales of Inventory Items / Average Dollar Value of Inventory Investment

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