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Retail Management
RMG 200

Cumulative Markup % CM$/CRetail$ GrossMargin% GM/NS$ Mainained markup(MMU)% NS-COGS/NS Average Inventory Retail BOM+ R EOM/2 Basically AVG INV # of BOM+lastBOM/Total # of periods Capital Turn Over Netsales(retail$)/AVG INV @ Cost($) GROSS MARGIN ROI(GMROI) GM$/AVG INV @ Costs($) RateofStockTurnover #unitsolds/AVG stock in units Stockturnover(retail) NetSales/AVG INV RTL($) BOM Stock Basic Stock+Planned sales for the month Basic Stock AVG Inv-AVG monthly sales MMU% IMU%-(MD%x a complement of IMU%) CMU Percent Markup$ on all goods on hand/ Retail$ on all goods on hand Order Point( point at which inventory Demand(leadtime+reviewtime)+Buffer or Backupstock available should not go below or else we will run out of stock b4 next order arives Sales per square foot Netsales/square”feet”ofselling area Sales per linear foot Netsales/linear”feet”ofshelving Sales per employee hour Netsales/number of employee hours Break Even Analysis Fixed Costs/Retail price-Unit Variable cost Retail Cost Markup% on retail Theories: Trickle-down theory: suggest that fashion leaders.00 32.50 (75-32.50)/75 = 56/7% are consumers with the highest social status- wealthy, well-educated consumers. After they Strategic Profit Model: net profit/net sales= net adopt a fashion the fashion trickles down to profit margin, net sales/total assets=asset consumers in lower social classes. When the turnover---- then net profit margin x asset turn fashion is accepted by the lower social class, it over= ROA(return on assets) no longer acceptable to the fashion leaders in the Net sales: cross amount of sales + Promotional highest social class allowance – customer returns Knock offs: a copy of the latest styles that are soldrating expenses%= operating expenses/netsales at lower prices though retailers targeting a broader market Total expenses/netsales ratio: total Mass-market theory: suggest that fashions spread expenses/netsales Net operating income= gross margin-operating across social classes. Each social class has its oexpenses/net sales fashion leaders who play a key role in their own social networks Net profit: gross margin- expenses Net profit percentage: net profit/net sales Buzz: genuine, street-level excitement about a hotAssets= liabilities+owners equity new product Current assets= accounts receivable+ Hype: artificially generated word of mouth, merchandise inventory+ cash+ other current manufactured by public relations people assets Subculture theory: theory of how fashion spreads Merchandise inventory= inventory/total assets that suggests that subcultures of mostly young andInventory turn over= net sales/average inventory less affluent consumers have started fashions for AVERAGE INVENTORY: 1 month: BOM inventory+EOM inventory/2 such things as colorful fabrics etc. Huff Gravity Model: trade area analysis model 6 Months: BOM inventory for each month+ End used to determine the probability that a customer of period inventory/7 1 year: BOM inventory for each month+ Last residing in a particular area will shop at a partimonth’s EOM/13 store or shopping centre Reillys law of retail gravitation: model used in Return on assets: net profit margin x asset turn over trade area analysis to define the relative abilityGMROI two cities to attract customers from the area = gross margin percentage x sales to stock ration between them =gross margin/net sales x net sales/avg inventory Regression analysis: statistical approach based on= gross margin/avg inventory the assumption that factors affect the sales of BOM= planned sales for month x stock to sales existing stores in a chain will have the same impactte on stores located at new sites Break even quantity:fixed cost/ actual unit sales price- unit variable cost Analogue approach: method of trade area analysis also known as the similar store or mapping approach in which the retail describes the site and trade area characteristic of r its most successful store and attends to find ones similar Gross Sales: Retail Price of item x volume (amount) CR&A(customer returns and allowances) Gross sales-CR&A= Net Sales COGS include number of items sold x original price plus freight unit and subtracted discount Gross Margin= Net sales-COGS NIBITDA(Net income before interest, taxes, depreciation,
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