Sales % distribution to season

Monthly Sales
Reduc % Distribution to season
Monthly reductions
BOM stock to sales ratio
BOM inventory
EOM inventory
Monthly addition to stock

sr no.

Logic
monthly sales= (the forecasted
total season for the six-month
period x monthly sales %)

1
2

Reduc % Distribution to season depends 1) shrinkage 2)markdowns 3)

shrinkage%= shrinkage/net sales

Monthly Reductions = Total reductions x Monthly reduction %

BOM stock to sales ratio

GMROI
sales to stock ratio
GMROI
Inventory turnover
average stock to sales ratio

BOM inventory/BOM stock

EOM inventory/stock

Monthly additions to stock

Merchandise Planning
mens sleeveless shirt
spring(6months)
100%
130000
100%
16500
4
98280
65600
113820

Jan
Feb
March
April
21%
12%
12%
19%
27300
15600
15600
24700
40%
14%
16%
12%
6600
2310
2640
1980
3.6
4.4
4.4
4
98280
68640
68640
98800
68640
68640
98800
98280
4260
17910
48400
26160
(monthly sales+monthly reductions+eom invento

130000*21%

o season depends 1) shrinkage 2)markdowns 3) discount to employees

e/net sales

shrinkage (employee theft, shoplifting,merchandise bei

40=shrinkage/27300
(16380*100/27300)=60%

Total reductions x Monthly reduction %

shrinkage= 10920
shrinkage= 40%
(16500*40%)

amount of inventory should be in hand at beginning of month in order to fulfil sales forecast.
week of inventory
Sales to stock ratio
gross margin% * sales to stock ratio
GMROI/gross margin%
gross margin/average inventory cost
sales to stock ratio * (1- GM%/100)
6 months/Inventory turnover

GMROI for category= 123%

123/45=2.73

2.73*(1-45/100)=1.50
6/1.5=4
GMROI= gross
margin% / (100 - gross margin
% )*
(52/weeks
cover)
example:
Product gross margin=50% average=26
weeks cover
GMROI= (50/100-50)*(52/26)= 2

monthly sales line * stock to sale ratio

GMROI= gross margin% / (100 - gross margin

% )*
(52/weeks
cover)
example: 27300*3.6=98280
Product gross margin=50% average=26
weeks cover

BOM stock for current month= EOM stock in previous

month
GMROI=
(50/100-50)*(52/26)= 2
sales (line2)+ reuctions (line4)+EOM stock(line7)-BOM stock (line6)

May
June
21%
15%
27300
19500
10%
8%
1650
1320
3.6
4
98280
78000
78000
65000
8670
7820
ctions+eom inventory)-BOM inventory

fting,merchandise being misplaced, poor handling)

left merchandise= 27300-10920=16380
reduction % distribution to season= 40%
(six months reductions* reduction%)

les forecast.

gross margin = 45%

- gross margin
(52/weeks

erage=26

- gross margin
(52/weeks

erage=26

Top down & B

Bottom up sales plan strategic sales plan
All products
5000
6000
Product A
1000
n/a
Product B
2500
n/a
Product C
1500
n/a

bottom up sales plan

1000+2500+1500

Store
Store 1
Store 2

Sales Wk 1
100
0

Sales Wk 2
125
0

Store
Store 1
Store 2

Sales Wk 1
100
100

Sales Wk 2
125
125

Store
Store 1
Store 2

Sales Wk 1
100
120

Sales Wk 2
125
150

top down
planning

600/500*100

600/500*125

Top down & Bottom up planning

top down sales plan
6000
1200
3000
1800

calculation
Logic
input
top down sales plan= (bottom up sales plan)* (strategic
1000*6/5
2500*6/5
1500*6/5

6000=1200+3000+1800

Sales Wk3
125
0

Sales Wk4
150
0

Month 1
500
0

Sales Wk3
125
125

Sales Wk4
150
150

Month 1
500
500

Sales Wk3
125
150

Sales Wk4
150
180

Month 1
500
600

600/500*125

600/500*150

(total planned sale/total previous sale)* (wk

wise sales)

sales plan)* (strategic sales plan/bottom up sales plan all products)

20 % more sale forecast

Sales
Product Group
1

Locked

Product X

1,000

Product Y:

2,000

Product Z

3,000

6,000
Lock

top down change plan

Original Sales
Product Group
1
Product X
Product Y:
Product Z

Product Group
1
Product X
Product Y:
Product Z

Original Sales

Locked

6000

New Sales
7,000

1000
2,000
3,000

Lock

1,000
?
?

Original Sales

Locked

New Sales

6,000
1000
2,000
3,000

7,000
Lock

1,000
2,400
3,600

logic
(new forecasted sales-locked sales)

6000*2000/5000
6000*3000/5000

Opening Stock

P1
200

P2
500

P3
450

P4
350

Forecast Sales

100

150

200

150

Period's Forward Cover

Closing Stock Required

500

450

350

300

Intake Required

400

100

100

100

On Order
OTB Remaining
Closing Stock

200
200
500

100
0
450

0
100
350

0
100
300

LOGIC
(closing stock required
-opening stock less
1
sales)
intake required=

2 Flat cover
stock requirement =

(closing stock required- (opening stock-forecast sales)

3 period cover is required

forecast is 100
3* periods sale forecast

3*100=300

3 Forward cover

add next 3 period sales

4 Opening stock

closing stock from previous period

first time entry is either from user input/ previous year data

5 On order

summaries provided by central merchandising system and sh

6 Order to receive/buy

intake requirement- order quantity

ordering of goods depening upon lead times

7 Closing Stock

(opening stock-sales)+ on order+ open to receive qty.

Forward cover weeks

1) supplier lead time

(sum total )

2) replenishment lead time

3) stock sorting into unfargmented rang

LADDER PLAN
P5
300

P6
300

100

100

300

300

100

100

0
100
300

0
100
300

Open to buy plan takes flow calculation

(intake-on order)

ing stock-forecast sales)

sales forecast
flat cover
forward cover

p1
100
3*100=300
100+200+300=600

*100=300
FLAT cover is prferred

input/ previous year data

erchandising system and shows item due for delivery in that period

lead times
open to receive qty.

ment lead time

ing into unfargmented range

es flow calculation

(200-100)+200+200
(opening stock-sales)+ on order+ open to receive qty.

p2
200

p3
300

er+ open to receive qty.

flat cover is used as stock requirement of 300 is there as

compared to forward cover is 600