Chapter 8 Managing a Retailer

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Chapter 8Managing a Retailers Finances

• Nanut Sitthiphong
• Chun-Lan Yeh

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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.

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Merchandise Budget
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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

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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

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Retail Reporting Calendar
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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.

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PeclersP a r i s

• Service provided
• - Style and product design consultancy
• - Promotion and communication consultancy
• - Origination and publication of trend books

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Planalytics

• Weather and climate-sensitive industries, both
  directly and indirectly, account for about
  one-third of the Nations 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.

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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

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Sourcing Simulator

• Developed by researchers at North Carolina State
  University, working with Textile/Clothing
  Technology Corp. (TC2) and the DAMA Project to
  facilitate retailers analyzes various "what if"
  sourcing scenarios.

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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 

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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.

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THANK YOU
QUESTIONS?
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Source

• http//findarticles.com/p/search?qtplanalyticstb
  artqffree
• http//www.peclersparis.com/index2.html
• http//reliability.sandia.gov/Software/Sourcing_Si
  mulator/sourcing_simulator.html
• http//www.planalytics.com/app/corp/start.jsp
• Retailing, Dunne Lusch, 5th Edition.