Class Notes (839,112)
Canada (511,191)
RMG 200 (77)
Ken Wong (25)
Lecture

Chapter 10.pdf

2 Pages
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Department
Retail Management
Course Code
RMG 200
Professor
Ken Wong

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Description
Chapter 10 Retailers use two distinct types of buying systems: - A staple merchandise buying system for basics – forecasting system much more straightforward – established sales history - A merchandise budget for fashion merchandise – no history Staple Merchandise Buying Systems - Follows a predictable order-receipt-order cycle - Does not work well with fashion merchandise Planning merchandise assortments 1. Organize the buying process by categories 2. Set merchandise financial objectives 3. Develop an assortment plan Buying systems 1. Staple/fashion merchandise buying system 2. Open-to-buy systems 3. Allocate merchandise to stores 4. Analyze merchandise performance Staple merchandise buying systems - Monitoring and measuring average current demand for items at the SKU level - Forecasting future SKU demand with allowances made for seasonal variations and changes in trend - Developing ordering decision rules for optimum restocking The Inventory Management Report - The more the retailer purchases at one time, the higher the carrying costs, but the lower the buying and handling costs Shrinkage - An inventory reduction that is caused by shoplifting by employees or customers by merchandise being misplaced or damaged or by poor bookkeeping Types of merchandise allocated to stores - As merchandise sells, it must replenished either by the vendor or through distribution centres - Pull Distribution strategy – orders for merchandise are generated at the store level on the basis of demand data captured by point-of-sale terminals  Pull strategy used more often by retailers because it’s more responsive to customer demand - Push Distribution strategy – merchandise is allocated to the s
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