Forecasting Sales Activity: This activity is to help you see how we look at past reports and project future sales and inventory needs. In our notes we cover formal calculations that we often use in retail to help us create inventory and sale projections. For this activity you will have the opportunity to get some practice projecting sales and inventory needs in this more basic model. You don't need to utilize the more formal methods shown in the notes for this course but it is important for you to see how projections are done. You will be projecting sales and inventory needs for 2 different retailers. Retailer 1 is for snowblowers and retailer 2 is for socks. Step 1 for this activity: Read Jeb's Outdoor equipment 2014 Sales records on snowblowers. Note the retail price, and the quantities sold each month. Step 2: We are assuming that there will be a 15% increase in sales for 2015 Follow the instructions listed in on page 3 and fill in the chart with your projections/ calculations. Remember in this assignment we are projecting-taking an educated guess as to how many units we might sell each month to reach our projected goals (and based on last year's sales) and how many units we should have in inventory. Step 3: Read Kelly's shoebox 2014 sales Step 4: Complete your 2015 sales projections for Kelly's based on 15% growth (just as you did with the snowblowers). Step 5: Note that Nike states that retailers typically have a stock to sales ratio of 4 to 1 on their socks. Based on this information, put your monthly unit projections back into this last chart and then calculate how many socks should be in inventory. Step 6: Save your completed charts with projections/inventory (or this whole document) and resubmit into the dropbox. Jeb's Outdoor Equipment 2014 Sales on Snowblowers Cub Cadet Snowblower Retail Price $799 Units Sold Dollars of Sales 5593 3995 1598 5 2 0 0 2014 Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec 0 2 5 9 13 0 1598 3995 7191 10387 Total 43 34,357 We are going to assume sales growth of 15% over last year 2014 sold a total of 43 units with sales totaling $34,357 2015 now project selling a total of 49 units 2015 Projection Cub Cadet Snowblower Retail Price $799 Step 1: Based on the 2014 above sales chart and your experience living in NYS, project the units you believe will be sold each month in order to reach the 15% sales growth. Be sure that your projections equal 49 total units sold. Step 2: Calculate your dollars of sales for each month. Step 3: Assume we have a display unit out front & the rest of the snowblowers are kept outback in stock room. How many units do we need to have on hand each month to reach sales goals? Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Total Units Sold |49 Dollars of Sales Inventory Needed Kelly's Shoebox Nike Basketball Socks 2014 Sales Retail Price $14 2014 Sales Units Sold Dollars of Sales Jan Feb Mar Apr May Jun Jul Aug 20 26 40 44 59 70 84 99 $280 $364 $560 $616 $826 $980 $1,176 $1,386 Sep Oct Nov Dec Total 85 50 50 58 685 $1,190 $700 $ 700 $812 $9,590 Assume sales growth of 15% over last year 2014 685 Plus an additional 15% 2015 788 Kelly's Shoebox Nike Basketball Socks 2015 Projection M Retail Price $14 2015 sales Units sold Dollars of sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total 788 Nike States that Retailers typically have a stock to sales ratio of 4 to 1 for socks Kelly's Shoebox Nike Basketball Socks 2015 Projection Retail Price $14 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total Units Projected to sell Stock to Sales Ratio Stock Needed 14 4 4 4 4 4 4 4 4 4 4 4