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Chapter 8 Managing a Retailer’s Finances

Chapter 8 Managing a Retailer’s Finances. Nanut Sitthiphong Chun-Lan Yeh. Chapter 8 Overview. Merchandise Budget 1. Planned sales 2. Planned BOM and EOM inventories 3. Planned retail reductions 4. Planned purchases at retail and cost 5. Planned gross margin. Merchandise Budget.

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Chapter 8 Managing a Retailer’s Finances

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  1. Chapter 8Managing a Retailer’s Finances Nanut Sitthiphong Chun-Lan Yeh

  2. Chapter 8 Overview • Merchandise Budget 1. Planned sales 2. Planned BOM and EOM inventories 3. Planned retail reductions 4. Planned purchases at retail and cost 5. Planned gross margin.

  3. Merchandise Budget

  4. Chapter 8 Overview • Retail Accounting Statement ⊙Income Statement or Profit and Loss Statement ⊙ Balance Sheet ⊙ Statement of cash flow • Inventory Valuation ⊙ Accounting Inventory System - The Cost Method - The Retail Method ⊙ inventory pricing systems - FIFO - LIFO

  5. How to get the right merchandise assortment and sufficient stock to achieve planned sales • According to Retail Reporting Calendar • Using Forecasting Technology • Peclers paris • Planalytics • Sourcing Simulator

  6. Retail Reporting Calendar

  7. PeclersP a r i s • Dominique Peclers established the styling agency in 1970. • In 1998, joined the British-American group Fitch Worldwide, specialists in brand and design consulting. • Today, international trend forecasting leader. 21 agents throughout the world. • Peclers Paris forecasts and deciphers today the fashion moods of tomorrow, imagine the future, and give sense to the product.

  8. PeclersP a r i s • Service provided: - Style and product design consultancy - Promotion and communication consultancy - Origination and publication of trend books

  9. Planalytics • Weather and climate-sensitive industries, both directly and indirectly, account for about one-third of the Nation’s gross domestic product, or $3.0 Trillion. -Conrad C. Lautenbacher, Jr. Vice Admiral, U. S. Navy (Ret.) Under Secretary for oceans and Atmosphere, United States Dapartment of Commerce. – • The benefits for retailers are more effective store-specific merchandise assortments, higher customer satisfaction levels, less safety stock at all levels of the supply chain, increased stock turns, fewer stock-outs, fewer markdowns and increased profitability.

  10. Planalytics • Business Forecasting service to help firms planning the merchandise budget by providing forecasting weather-driven changes in supply, demand and prices for products and services. • Results : - Risk Management - Improved Control of Cost - Increased Revenue

  11. Sourcing Simulator • Developed by researchers at North Carolina State University, working with Textile/Clothing Technology Corp. ([TC]2) and the DAMA Project to facilitate retailers analyzes various "what if" sourcing scenarios.

  12. Sourcing Simulator • Benefits: - Analyzes various "what if" sourcing scenarios on methods of supply [quick response (QR) vs. vendor-managed inventory (VMI) vs. fixed delivery times] and amounts of merchandise - Provides financial performance measures for comparison 

  13. Sourcing Simulator • What can you manipulate in Sourcing Simulator? - the line of apparel: number of stock keeping units (SKUs), wholesale costs, other procurement costs, inventory carrying costs, etc. - the buyer's preseason forecast of demand: total volume, SKU mix, and seasonality pattern. - means of merchandising: retail price, markdown schedule, etc. - sourcing means: type of vendor, initial delivery quantity, number of in-season replenishment orders, lead time until receipt, vendor reliability, etc.

  14. THANK YOU QUESTIONS?

  15. Source • http://findarticles.com/p/search?qt=planalytics&tb=art&qf=free • http://www.peclersparis.com/index2.html • http://reliability.sandia.gov/Software/Sourcing_Simulator/sourcing_simulator.html • http://www.planalytics.com/app/corp/start.jsp • Retailing, Dunne Lusch, 5th Edition.

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