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Chapter 8: Merchandise Buying and Handling - Coggle Diagram
Chapter 8: Merchandise Buying and Handling
Dollar Merchandise Planning Methods
Retailers must balance inventory to meet demand without overstocking.
Key planning methods:
Percentage Variation Method – Adjusting stock based on sales fluctuations.
Weeks’ Supply Method – Ensuring stock aligns with weekly sales patterns.
Basic Stock Method – Maintaining a consistent level of stock.
Stock-to-Sales Method – Managing inventory based on sales performance.
Dollar Merchandise Control
Open-to-buy (OTB) helps retailers budget and plan purchases effectively.
Adjustments may be required due to:
Incorrect pricing or merchandise selection.
Trend-driven purchases with short product lifecycles.
Improper safety stock levels.
Overbuying from multiple vendors.
Poor forecasting of seasonal trends.
Lack of vendor communication.
Inventory Planning
Determines optimal quantity and timing of stock to align with sales demand.
Key dimensions of merchandise mix:
Variety – Different types of product lines.
Breadth – Assortment of brands within a product line.
Depth – Number of stock-keeping units (SKUs) per brand.
Merchandise Management
Merchandise management involves analysis, planning, acquisition, handling, and control of inventory.
Merchandise is an asset to a retailer and the core of the business, requiring careful management.