It is the end of the first quarter. Mr. Johnston, the handbag buyer for a women's specialty store in California, studies the sales and inventory results of this department as he approaches the second quarter of the spring season. Before Mr. Johnston analyzes the actual results of the season-to-date performances, he examines the classification reports for the department to be as certain if the composition of his stock is in balance with the sales records. He finds that the leather handbag category-in which the price lines are highest-has fewer unit sales, which result in a high dollar inventory. The "fashion" fabrication of the season-crochet and straw, combined with new styling-has caused an out-of-proportion increase in the unit sales of this group when compared to the sales of previous years. This trend has surpassed even Mr. Johnston's originally high expectations of this fashion. Additionally, the weather, which has turned unusually warm for this time of year, has been a catalyst to this vigorous selling in the spring-summer look. On the six-month merchandise plan, the season-to-date figures for the department are shown in Figure 39. Figure 39. Six-month merchandising plan As Mr. Johnston examines these figures, he considers the following facts: Sales in February missed the plan slightly, March sales exceeded the plan, but April, when Easter was the second Sunday, missed plan substantially, resulting in a 3.4% decrease in sales for the quarter. Receipts have been close to the plan and the remaining on order is scheduled to ship close to 100%. If sales for the second quarter continue as they did in the first quarter, Mr. Johnston will end the season over the inventory plan. To accomplish the second quarter and seasonal plan objectives (i.e., to attain the originally planned figures regarding sales, markdowns, and turnover), what actions must Mr. Johnston take especially going into the important Mother's Day selling period for handbags? What are the alternatives, if any? What adjustments do you recommend? Justify your suggestions mathematically. It is the end of the first quarter. Mr. Johnston, the handbag buyer for a women's specialty store in California, studies the sales and inventory results of this department as he approaches the second quarter of the spring season. Before Mr. Johnston analyzes the actual results of the season-to-date performances, he examines the classification reports for the department to be as certain if the composition of his stock is in balance with the sales records. He finds that the leather handbag category-in which the price lines are highest-has fewer unit sales, which result in a high dollar inventory. The "fashion" fabrication of the season-crochet and straw, combined with new styling-has caused an out-of-proportion increase in the unit sales of this group when compared to the sales of previous years. This trend has surpassed even Mr. Johnston's originally high expectations of this fashion. Additionally, the weather, which has turned unusually warm for this time of year, has been a catalyst to this vigorous selling in the spring-summer look. On the six-month merchandise plan, the season-to-date figures for the department are shown in Figure 39. Figure 39. Six-month merchandising plan As Mr. Johnston examines these figures, he considers the following facts: Sales in February missed the plan slightly, March sales exceeded the plan, but April, when Easter was the second Sunday, missed plan substantially, resulting in a 3.4% decrease in sales for the quarter. Receipts have been close to the plan and the remaining on order is scheduled to ship close to 100%. If sales for the second quarter continue as they did in the first quarter, Mr. Johnston will end the season over the inventory plan. To accomplish the second quarter and seasonal plan objectives (i.e., to attain the originally planned figures regarding sales, markdowns, and turnover), what actions must Mr. Johnston take especially going into the important Mother's Day selling period for handbags? What are the alternatives, if any? What adjustments do you recommend? Justify your suggestions mathematically