Professional Documents
Culture Documents
Managing Merchandise Assortments
Managing Merchandise Assortments
12
-2
A merchandise category is an assortment of
items that customers see as substitutes for each
other.
Problems
Vendor category captain may have different goals
than retailer 12
-5
The vendor category captain
could collude with retailer to
fix prices
12
-6
Merchandise Group…………Men’s wear
Department………….……….Young Men’s wear
Classification........................Pants
Category..............................Jeans
Sock Keeping Unit (SKU)…..Levi, 501, size 26
waist, 32 inseam
s
a
g
me
I
R n M V/ etty
G
a
y
c
a
y
Merchandise managers have control over
The merchandise they buy
The price at which the merchandise is sold
The cost of the merchandise
12
-9
Digital Vision / Getty Image
GMROI = Gross Margin Percent x sales to stock ratio
= gross margin
avg inventory at cost
12
-
10
10
Strategic Corporate Level
Return on Assets= Net Profit
Total Assets
12
-
14
14
Month Retail Value of Inventory
EOM January $22,000
EOM February 33,000
EOM March 38,000
Total Inventory
$93,000
another approach…
To improve inventory turnover
Buy merchandise more often
Buy in smaller quantities which should reduce
average inventory without reducing sales
12