The newly introduced category is typically, targeted to high-income innovators. For example, high fashions like women blouses are initially introduce and sell only at exclusive stores. Once the category has reached the growth and maturity stages, they typically will focus on more middle income or mass-market customers like departmental store to gain more sales. Finally, once the category has reached the decline stage, they will make available to low income customers who follow rather than lead fashions.
The characteristics of variations on the categories life cycle can classifieds as staple, seasonal, fashion, and fad. The distinguishing characteristics between them are whether the category is last for many seasons or just one season, whether
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The retailers used the overall retailing strategy and strategic profit model for their planning to achieve their financial strategy. The top management typically will look into overall economic trends in each trade area in which they are competing. They also look into overall how the sales trends in each store and the impact of the new store openings and store closings. The top management will develop a sales forecast for the total company based on the information collected. They must also make the strategic decisions such as variety, assortment and service level to decide what types of merchandise to buy base on the types of merchandise whether are expecting in the growing, maturity or decline stages. With this forecast plan, the merchandise forecasting process will break down into merchandise groups, departments, classifications and …show more content…
A focus group is a small group of respondents interviewed in unstructured format. Participants are encouraged to express their views and to give comment on the views of others in the group. This type of interviewed seen to be more effective than data collected by individual interviews as they seen to motivate people to talk more freely and honestly. What is inventory turnover?
Inventory turnover is defined as:
Inventory turnover = (Net sales)/(Average inventory at retail) OR
Inventory turnover = (Cost of goods sold)/(Average inventory at cost)
The first definition of inventory turnover is at retail while the second definition is at cost. Some retailers prefer to measure inventory turnover at retail while others at cost but there is no difference between these two definitions as they yield the same result. The inventory turnover rate is typically expressed on an annual basis rather than on month or parts of a year. What is average inventory?
Average inventory is calculated by dividing the sum of the inventory for each of a few months by the number of months:
Average inventory = (Month 1+Month 2+Month 3+Month 4)/(Number of months)
How could we determine the inventory for the month?
We typically used to take the end of month (EOM) inventories for a few months and divide by the number of months available. For
...ory holding costs, ordering costs, and shortage costs, and have a classification system for inventory items.
Inventory turnover of Costco is 11.7. Therefore, days inventory (DIO) is 31 days when dividing 365 days by 11.7. Average receivables period (DPO) is 3 and average payable period (DSO) is 33. DIO plus DSO minus DPO is 1 meaning there is only one day gap. This simply tells her that the company is performing well.
Various ratios are used in this analysis. The organization’s WIP and FG inventory turnover ratios from 2009 demonstrate that the firm takes fewer days to sell both inventories (3.64 days and 73.43 days respectively) than the average firm in the industry In 2009, the total asset turnover ratio for Gemini Electronics was 1.37 while the industry average was 1. This is an indication that Gemini Electronics is generating business at a steady pace. Gemini Electronics is utilizing its fixed assets at a higher rate than other firms in the industry. Their utilization shows the Gemini’s ability to use L, P, & E in order to generate sales. Gemini Electronics A/R is 40.16, which is 25% higher than the industry average. This means Gemini Electronics waits about 40 days to receive payment for goods sold. High levels of A/R can negatively affect the firm and their stock
In 2012 Macy’s had a gross profit margin and net income margin of 11148, and 1335 respectively. In 2013 Macy’s had a gross profit margin and net income margin of 11206, and 1486 respectively. In 2014 Macy’s had a gross profit margin and net income margin of 11242, and 1526 respectively ("Annual Reports/Fact Book -Macy 's Inc."). Gross profit and net income margin both show steady increases year over year, this data indicates Macy 's is continuing to grow at a sustainable rate. In 2013, Macy’s inventory turnover was 3.15, and decreased to 3.03 in 2014. Number of days sales in inventory in 2013 was 115.84 and 120.28 in 2014 ("Annual Reports/Fact Book -Macy 's Inc."). With the decrease in inventory turnover and conversely an increase in number of days sales in inventory Macy 's is showing a decrease in managing inventory, in other words this excess inventory is decreasing
Average inventory is calculated using the sum of the first quarterly reporting month to the last quarterly reporting month and then dividing this quantity by two (Gibson, C.H., 2013, pg. 239). With this tool we can see if a business is turning over inventory in an adequate industry manner. It is a beneficial to compare with other similar industries. A high score shows that a business is bringing in inventory and getting rid of it quickly (Gibson, C.H., 2013, pg. 239). A low score means that inventory is not turning over as quick as possible. This indicator allows a business to stock up to meet the inventory necessities. In our comparison with Home Depot and Lowe’s we see a major difference in inventory turnover. Lowes leads with 116% and Home Depot at 13%.s a result we see that Home Depot is turning inventory in a great manner that it is possible to increase
This passage should encourage us to never give up. Financial Measures According to Chipotle Mexican Grill, Inc.’s financial ratios, “inventory turnover ratio rose to 202.33, below company average. However, the average processing period stayed unaffected at 2 days, in the Sep. 30, 2015 quarter.” Within the services sector, there was only one business that accomplished a greater inventory turnover ratio.
.... In addition, inventory turnover shows a consistent increase from 2.16 in 2011 to 2.38 and 2.49 for 2012 and 2013 respectively.
The inventory turnover decreased from 3.8 to 3.59. This is explained by the higher increase in the average inventory (37%) than the increase in cost of sales (29%) during 2005. This means that the rate at which inventory is sold is dropping
Inventory Turnover (2011 only): For the year 2011, the inventory turnover was calculated by the cost of good sold divided by the typical average amount of inventory. The average inventory was equal to the current inventory plus the prior inventory all divided then by two. Resulting in the 2011 Inventory Turnover to be equal to 3.480 because 5,385,088 / 1,547,223.5=
... inventory turnover was found to be very low. The low inventory turnover ratio was an indicator of inadequacy, since inventory usually has a rate of return of zero (Inventory Turnover Ratio Interpretation, 2009). It also implied either poor sales or excess inventory. A low turnover rate indicated poor liquidity, convincible overstocking, and obsolescence, but it would have also reflected a planned inventory build-up in the case of material shortages or in anticipation of rapidly rising prices. (Inventory Turnover Ratio Interpretation, 2009) And a rapid and unexplained rise in the number of sales per day in receivables in addition to growing inventories to cover the shortage was noted. The interviewee (Public Accountant) could smell something suspicious which led him for more detailed procedures and proactive investigation at the end of which a fraud was detected.
The Fashion Industry can be described as a glamorous world with cameras flashing, beautiful models strutting down the runway, in stunning and grand designs. What really goes on behind fashion’s dolled up doors is only an illusion compared to what reality is. Beautiful people, stylish clothing and timeless sophistication all make up the illusion of the glitz and glam of the fashion industry, but behind the curtains countless of models and designers constantly fall victim to this industry’s ever changing wrath. Fashion can be defined as a popular trend especially in styles of dress, ornaments or behavior. A model is a person who poses or displays for art purposes, fashion or other products and advertising. Fashion models are used mainly to promote products focusing mostly on clothing and accessory. The two main type of modeling in the fashion industry is commercial modeling and high fashion modeling. High Fashion models usually work for campaigns, designer’s collections and magazine editorials for high fashion designers. Runway modeling also known as “catwalk modeling” is displaying fashions and is generally performed by high fashion models. In my research paper, my main focus will be the multiple effects on high fashion models based upon the industry’s unregulated standards.
Three methods that L.L. Bean uses to determine past demand data and a specific item forecast to decide how many units of that to stock are: frozen forecast, A/F ratio demand, and forecast demand. Frozen forecast is based on items in the future period, which is done by the forecasting department and it involves book forecasting and past demand data. One advantage is that this forecast is used together with historical forecast errors, known as A/F ratios. A/F ratios are comprised of past season items and actual demand. Having this information, Bean will be able to estimate the range of inventory that the product will be in the upcoming season after converting the point forecast into a demand distribution. E.g., a 50% chance that the forecast
Sethi, S, Yan, H, & Zhang, H. (2005) Inventory And Supply Chain Management With Forecast Updates New York, NY : Springer.
Inventory can be explained as any assets that are held for future use or sale. Inventories are held for a variety of reasons, such as customer demand for end items, smoothing production, a hedge against stock outs and price increases, and economical purchasing. It is very costly and wasteful to keep large inventory on hand. The new technology and application quantitative tools and techniques for inventory management have permitted decrease in inventory. Top management needs to understand the role that inventories have on a company’s financial performance, operational efficiency, and customer satisfaction and strike the proper balance in meeting strategic objectives. They are responsible in keeping sufficient inventories to meet demand of the customers by sustaining the lower cost as possible. Inventories are required for a business to operate efficiently and effectively. Inventory management is a very significant part of basic operations activities. Most businesses and general organizations obtain most of their revenue through the sale of inventory.
Asset turnover ratio is used to calculate the efficiency to utilizing total asset for the sales. Use your assets in produce your product productivity and rise the sales to earn more profit. The asset turnover ratio of Nestle and Duty Lady Milk are similar in these 3 years. But, the two asset turnover ratio is considered as a low ratio (unproductive capacity). A low ratio means there will be less efficient of firm in total asset for employed. Nestle does not efficient in using firm’s asset to produce more