Chapter 16
? To Describe Major Aspects of Financial
Merchandise Planning and Management
? To Explain the Cost and Retail Methods of
Accounting
? To Examine Alternative Methods of
Inventory Control
? To Integrate Dollar and Unit
Merchandising Control Concepts
? Dollar Control
? Unit Control
? Merchandise Available for Sale
? Cost of Goods Sold (COGS)
? Gross Profit
? Net Profit
? Retail Methods
? Cost Accounting System
? Physical Inventory System
? Book Inventory (Perpetual)
– FIFO
– LIFO
? Calculate Cost Complement
? Calculate Deductions from Retail Value
? Convert Retail Inventory Value to Cost
Planning Purchases
Planning Profit Margins
Reduction Planning
Inventory-Level Planning
Sales Forecasting
Designating Control Units
Designating Control Units
1,Departmentwide Classification
2,Classifications Within Departments
3,Price Line Classifications
4,Standard Merchandise Classifications
Sales Forecasting
1,External Factor Evaluation
2,Internal Factor Evaluation
3,Seasonality
Inventory-Level Planning
1,Basic Stock Method
2,Percentage Variation Method
3,Weeks’ Supply Method
4,Stock-to-Sales Method
Reduction Planning
1,Markdowns
2,Discounts
3,Shortages
Planning Purchases
Planned Purchases = Planned Sales +
Planned Reductions +
Planned EOM Stock -
BOM Stock
Planning Profit Margins
Required Planned
Initial Retail Planned Planned
Markup Expenses Profit Reductions
Percentage Planned Net Sales + Planned Reductions
=
+ +
? Physical Inventory Systems
? Perpetual Inventory Systems
? Inventory Turnover
? Gross Margin Return On
Investment (GMROI)
? Reorder Point
? Reorder Quantity
– EOQ
? Major Aspects of Financial Merchandise
Planning & Management
? Cost and Retail Methods of Accounting
? Merchandise Forecasting and Budgeting
Processes
? Alternative Methods of Inventory Unit Control
? How to Integrate Dollar and Unit
Merchandising Control Concepts
Questions?
Questions?