CASE STUDY 4 FORMULATING A Six-MONTH PLAN When the buyer for the activewear department started to develop the merchandise plan for the Spring season, she reviewed the six-month plan in Figure 35. The num- bers that were achieved represent the department's performance last year for a fast- selling and up-trending department. The buyer was given the following information to plan the upcoming Spring season: Planned sales + 4.0% Planned markdown 45.1% Planned turnover 0.98 Cumulative markup % 68.7% For next Spring the buyer has to take into account a shift in Easter selling. Last year. Easter occurred on the first Sunday in April, therefore, pre-Easter sales happened the last two weeks in March. This year, Easter falls in the third week of April Based on the sales success this department has experienced over the last two years, the buyer is concerned about keeping that trend going. Acting as the buyer for the activewear department, formulate the six-month plan: a. Calculate each month's percentage of sales for last year. b. Calculate the total season sales planned. What will the planned sales be by month taking into account the Easter shift? Calculate the planned markdown dollars and percentage by month. d. Calculate the BOM stock needed by month. e Calculate the receipt dollars needed to achieve the BOM stock Does this plan achieve the desired turnover necessary? 8. How will a buyer achieve the increased cumulative markup percentage? What is the potential effect on gross margin given the higher markdown percentage? h. How should the buyer address her concern regarding sales potentially slowing down? 4500-605 Figure 38, Sex Month Morchandising Plan for Women's Activewear Department Women's Activewear SEASON TOTAL MAY JULY AUGUST SPONG Sulea to toto FEBRUARY 15.22% 385.0 MARCH 187 790.0 APRIL 19 650.0 19 8000 JUNE 21 8500 6250 4.800.0 SALESS 6.1 5.8 6.7 6.3 5.7 STOCK-SALES RATIO 6.9 $4,200.0 4.600.0 4.350.0 5,000.0 5,400.0 4,300.0 4,800.0 4,664.3 BOM STOCKS (Retain Plan Inic Pevsod Actual Last Year Plan Last Year Plan Revised Actus Last Year Pian to Sales X by Month Roed Actual Last Your Plan Revised Actual MARKDOWNS S $220.0 2880 254,0 348.0 420.0 375.0 1,9140 100.0% 5.6 51X-MONTH SEASONAL DOLLAR MERCHANDISE PLAN 311 $1.4780 8280 1,554.0 1,5480 270.0 1,500.0 7,178,0 PURCHASESS (Retail PLAN ACTUAL SEASON TOT Salos CMU % Markdown Gross Margin % Average Stock Turnover LAST YEAR $4,500.00 68.596 42.5% 55,1% 4,0643 0.016 CASE STUDY 4 FORMULATING A Six-MONTH PLAN When the buyer for the activewear department started to develop the merchandise plan for the Spring season, she reviewed the six-month plan in Figure 35. The num- bers that were achieved represent the department's performance last year for a fast- selling and up-trending department. The buyer was given the following information to plan the upcoming Spring season: Planned sales + 4.0% Planned markdown 45.1% Planned turnover 0.98 Cumulative markup % 68.7% For next Spring the buyer has to take into account a shift in Easter selling. Last year. Easter occurred on the first Sunday in April, therefore, pre-Easter sales happened the last two weeks in March. This year, Easter falls in the third week of April Based on the sales success this department has experienced over the last two years, the buyer is concerned about keeping that trend going. Acting as the buyer for the activewear department, formulate the six-month plan: a. Calculate each month's percentage of sales for last year. b. Calculate the total season sales planned. What will the planned sales be by month taking into account the Easter shift? Calculate the planned markdown dollars and percentage by month. d. Calculate the BOM stock needed by month. e Calculate the receipt dollars needed to achieve the BOM stock Does this plan achieve the desired turnover necessary? 8. How will a buyer achieve the increased cumulative markup percentage? What is the potential effect on gross margin given the higher markdown percentage? h. How should the buyer address her concern regarding sales potentially slowing down? 4500-605 Figure 38, Sex Month Morchandising Plan for Women's Activewear Department Women's Activewear SEASON TOTAL MAY JULY AUGUST SPONG Sulea to toto FEBRUARY 15.22% 385.0 MARCH 187 790.0 APRIL 19 650.0 19 8000 JUNE 21 8500 6250 4.800.0 SALESS 6.1 5.8 6.7 6.3 5.7 STOCK-SALES RATIO 6.9 $4,200.0 4.600.0 4.350.0 5,000.0 5,400.0 4,300.0 4,800.0 4,664.3 BOM STOCKS (Retain Plan Inic Pevsod Actual Last Year Plan Last Year Plan Revised Actus Last Year Pian to Sales X by Month Roed Actual Last Your Plan Revised Actual MARKDOWNS S $220.0 2880 254,0 348.0 420.0 375.0 1,9140 100.0% 5.6 51X-MONTH SEASONAL DOLLAR MERCHANDISE PLAN 311 $1.4780 8280 1,554.0 1,5480 270.0 1,500.0 7,178,0 PURCHASESS (Retail PLAN ACTUAL SEASON TOT Salos CMU % Markdown Gross Margin % Average Stock Turnover LAST YEAR $4,500.00 68.596 42.5% 55,1% 4,0643 0.016