1.

A major apparel retailer is expanding its business by opening apparel stores throughout South
India. This is based on the response for its stores in North India. Their financial projections are as
follows. Planned sales for next 6 months is Rs. 20,00,000. The sales is going to be split for the next 6
months in the range of 20%, 18%, 11%, 13%, 28%, 10% starting from first month respectively.
Planned markdowns are 12% of planned sales which is foreseen as 2% for each month. The GMROI
target is 125% with a gross margin expectation of 40%. Prepare a six month merchandising plan
with a uniform stock to sales ratio for 6 months and calculate OTB for each month if they have
planned purchases of Rs. 50,000 every month. EOM stock for last month is Rs. 9,20,000. Perform an
analysis on the planning and state whether the retailer has planned well with reasons.
2. Prepare a 6 month merchandising plan for the retailer “Alpine International Inc.” using the
following data:
i) Planned sales = Rs. 8,00,000
ii) Margin% = 20%
iii) Stock to sales ratio =3 (Starts with 3.4 and lowers to 2.6 with same sales ratio for two mid
months)
iv) GMROI = 150%
v) Mark downs = 10% (Markdowns are in the ratio of 4:3:2:1:2:1 for next 6 months)
vi) Shrinkages of 5% each for the mid two months
vi) Planned sales are divided at a ratio of 4:3:6:3:4:2 for the next 6 months
vii) EOM stock for last month = Rs. 40,000
3. The 6 month merchandising plan for an apparel retailer “Alaska Corp.” is to be prepared with the
following details for spring 2016 season.
Spring 2016 Plan February March April May June July
Sales $ 80000
Sales% 100 20 18 22 15 15 10
distribution
Reduction% 100 6 12 6 40 16 20
SSR 4 3.4 3.8 4.2 4.2 4.4 4
Monthly 5000
reductions $
Last year 60000 12000 6000 12000 6000 15000 9000
sales

Determine the OTB for each month with a planned purchase of $ 18000 for the 6 months divided at
a ratio of 4:3:2:5:4:2. EOM stock for July is $5000. Perform an analysis and confirm with reasons
whether the retailer has planned correctly with respect to historic data available.