You are a glove buyer for a major specialty store. On November 1, one of your occasionally used importers offers immediate delivery on a group of mens capeskin gloves made in the Philippines that are 100% wool lined. The vendor offers 1,200 dozen pairs of gloves at $228 per dozen if the entire quantity is purchased. If not, the cost is $264 per dozen. To properly assess this offering, you must consider the factors that will be helpful in making the proper decision. They are:

Because of the strong sales of this classification and market conditions, the buyer would like to take advantage of this offering and use a strategy in pricing this group that will generate a markup above the required departmental 52.5% to afford a successful post- Christmas clearance sale. The buyer begins to do more basic calculations and considerations that will justify the final course of action to be taken.

O P T I O N 1 : S E L L T H E N E W I N V E N T O R Y N O W

Integrate all of special price inventory with the current inventory of gloves and sell at the current price-point offered in store. In the existing inventory, gloves that cost $264/dozen carry a 50% markup. Using this as a guideline, what is the retail price per pair for the gloves in stock?

If the new inventory will be sold at the existing price point, what will be the markup achieved on the new inventory?

S E L L T H E N E W I N V E N T O R Y F O R D E CE M B E R S A LE

There is a GIFT FOR CHRISTMAS as planned for December 1 which features womens Italian, kidskin leather gloves retailed at $39. This merchandise offering is outstanding value because of quality combined at lower than comparable priced items. Should the mens gloves be combined with this particular promotion?

Calculate MU% achieved at this price and compare with MU goal to

determine response.

O P T I O N 3 : M I X O F O P T I O N 1 A N D 2

Immediately upon delivery, should you integrate half of the entire amount of gloves into the $44 price line assortment, and include the balance half in the December 1 ad? Calculate MU% achieved at this price and compare with MU goal to determine response.