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Net Sls ASP, Reg Gross Sls U, Clear Gross Sls U, Promo Gross Sls U, Net…
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Net Sls ASP KATA
Understand the direction or challenge: In this first step we determine the problem we are trying to solve.
Challenge
Finding a way to use price type planning in order to get a nuanced Net Sls ASP using ASP history and taking into account planned Rtns
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Experiment against obstacles: Once a target condition is established, we then identify the obstacles in our way. These obstacles allow us to define, and run experiments against them in order to learn what works, and what doesn't.
Experiment Record
Check viability of planning price type Gross Sls ASP in order to take the noise out of the Set Sls ASP data while also incorporating planned Rtn $/U to get a fully connected Net Sls ASP
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Grasp the current condition: Once we define the challenge, we need to understand not only what we know to be true now, and also what we do not yet know. Put another way, we attempt to deeply understand the current condition.
Current Condition
GM Planner is using Price Type Net Sls ASP Which is implying Returns in the data that does not necessarily align with returns planned elsewhere in MFP Cost.
In Order to drive to the Net Sls ASP output the GM Planner is using historical Dmd and Rtn ASP relationships. This is possibly compounding Rtn ASP affects already taken into account at the price type level and is also not necessarily inline with Rtns planned elsewhere in MFP Cost.
Establish the next target condition: Using an American football analogy, if the "challenge" is to score a touchdown...the target condition may very well be to get a first down. In other words, the target condition brings us one step closer to the challenge.
Target Condition
Gain the ability to use historical price type ASP data (without having to make subjective decisions on adjusting for outliers) combined with Rtn $/U plans to derive a nuanced and fully connected Net Sls ASP
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ASP history has return impacts baked into the number. If using history as a basis you are technically taking into account how LY returns mixed into that number.
Do you need to restate the ASP with returns adjusted out and then also plan return u/$ by price type that hold to ttl Rtn $/U.
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In this entire Net Sls U tree returns are implied by history and are not in line with Rtn U in plan. The other half of the ASP calc (Net Sls R) is using plan as the anchor creating a mismatch
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Dmd Ttl R
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Dmd ASP
Paste into MFP Cost
No Rtn ASP taken into account to get to Dmd ASP. This is a totally separate function that should be planned to organicaly arrive at a nuanced Net Sales ASP that takes into account the Dmd $/U that you have planned with the Rtns $/U that you have planned.
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Rtn R
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Reg Rtn R
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Reg Rtn ASP
Reg Rtn U
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Reg Rtn AUC
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Gross Sls R
Clear Gross Sales R $
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Clear Gross ASP
Clear Sls U
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Total Sls U
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Dmd ASP
Paste into MFP Cost
No Rtn ASP taken into account to get to Dmd ASP. This is a totally separate function that should be planned to organicaly arrive at a nuanced Net Sales ASP that takes into account the Dmd $/U that you have planned with the Rtns $/U that you have planned.
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FOR BOTH SALES & RETURNS: IF THE GAP REMAINS CONSISTENT GM STAYS THE SAME
EXAMPLE: ASP GOES UP 5% AND AUC UP 5% = GM STAYS THE SAME / OR / ASP -10% AND AUC DOWN -10% = GM STAYS THE SAME
MOVEMENT DOESN'T MATTER IF IT GOES UP OR DOWN AS LONG AS THE GAP STAYS THE SAME IT DOESN'T CHANGE GM
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FOR SALES
IF GAP WIDENS: = POSITIVE GROSS MARGIN IMPACT
DOESN'T MATTER IF THEY GO UP OR DOWN. IF THE GAP BETWEEN THE TWO WIDENS THEN GM GOES UP
CONVERSELY IF GAP NARROWS: = NEGATIVE GROSS MARGIN IMPACT
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To get to Returns at Retail $, Units & Cost $ By Price Type while Anchoring to MFP Total Rtn R Plan
Override Function: Quarterly Return Strategy Adjustments to ASP & AUC. The default will mirror Quarterly Sales Strategy - in Sales Planner unless overridden
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Override Function: Quarterly Sales Strategy Adjustments to ASP & AUC. Note: Quarterly Sales Strategy feeds to Quarterly Returns Strategy as default unless overridden on Returns tab
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Using Gross - Less Returns = Net (R U C) || Net Sales / Net Units = Net ASP & AUC || Net Sales R - Less Net Sales C = GM $ / Net Sales R = GM %
FOR RETURNS
IF GAP WIDENS: = NEGATIVE GROSS MARGIN IMPACT
DOESN'T MATTER IF THEY GO UP OR DOWN. IF THE GAP BETWEEN THE TWO WIDENS THEN GM GOES DOWN
CONVERSELY IF GAP NARROWS: = POSITIVE GROSS MARGIN IMPACT
QUESTION REMAINS: SHOULD THE RELATIONSHIP BETWEEN GROSS SALES ASP/AUC CHANGES IN RELATIONSHIP TO RETURNS ASP/AUC CHANGES?
PRICE TYPE PLANNING IS TO ULTIMATELY GET A NUANCED NET SALES AUC & UNDERSTAND WHAT GOES INTO THEIR PLAN TO CREATE THAT NUANCE