figure 6
Provides an overview of modern inventory control systems and sales
records. Topics include the retail method of inventory, operating statements, techniques of
planning, and methods of figuring mark-ups, markdowns, open-to-buy, and terms of sales.
BUF 2255- Merchandising Planning and Buying (1)
Part A (60%)
As a buyer for XYZ retail store you will choose a classification of merchandise that you would
like to buy. You will decide where your store will be located and what type of store it will be.
This information will be backed up by valid research and trend information. Once you have
decided on the type of merchandise you want to carry and have developed a name for the store
and location you will have $1,182,000 (Retail) to spend to stock your store.
This money will be your open-to-buy (OTB) for the season and we will use the Spring/Summer*
season which will encompass February, March, April, May, June, and July as there is information
that is readily available. You will detail down to the SKU level* what your department will
consist of and how you plan your inventory flow. We will discuss this in more detail as the
course progresses. The written portion of the project will be a minimum of three typed double
spaced pages discussing the process and your research and why you choose the product
classification that you did, the balance of the project will be numbers based. Once you determine
the product category we will use 50% markup which you will use to determine the costs of the
merchandise that you will need to buy.
*When illustrating your SKU’s please be sure this is shown right after the three page discussion
portion of the project. Your SKU’s should also be typed.
Part B.
Using the figures provided you will calculate the following for the XYZ store.
1. Open to buy for each month
2. Average monthly sales
3. Average monthly on order
4. Mark down % for each month
Planned sales
+ Planned reductions
+Planned EOM Stock
= Total monthly needs
-BOM Stock
=Planned purchases
-Merchandise on order
=Open to buy (At Retail)
16
Planned Sales On order Employee MD$ Shortages EOM BOM
Discount
Feb. $300,000 $125,000 2% $8,000 2% $200,000 $160,000
Mar. $200,000 $15,000 3% $12,000 4% $80,000 $200,000
Apr. $300,000 $145,000 4% $4,000 5% $110,000 $80,000
May $200,000 $35,000 0% $3,000 7% $90,000 $110,000
June $400,000 $170,000 5% $18,000 2% $210,000 $90,000
July $200,000 $23,000 7% $25,000 3% $70,000 $210,000
Part C. Solve the following:
1. After careful analysis of the economic data from the U. S. Government the XYZ store set a
sales plan increase for the next season (Feb-July) of 9.1%. Based on this years sales plan what is
the companies new projected sales plan for the next season?
2. In the prior year same sales period the XYZ store had actual sales of $1,740,000.00. What was
dollar increase/decrease for the sales period and suggest reasons for the change from one season
to the next. What was the percentage increase/decrease?
