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Complicated stock keeping units (SKU) estimation Strong effect of Fashion Domination of textile supplier and retail buyers over manufacturers Difference of product ordering procedure
To reduce possible Fatal-loss from an uncertain demand prediction retail buyers use :-
1)Quick response (QR) system 2)Electronic Data Interchange (EDI) 3)Point of sale (POS) system 4)Management Information System (MIS) Implementation of these helps in 1)Effective order-reorder schedule 2)Inventory cost management 3)Faster sourcing strategy 4)Improvement of Assortment planning
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Planning sales goal Planning stock level for company & each store Planning assortment plan Making a sales forecast report
3 steps of Bottom-up forecasting process: Determining sales potential for individual item Planning total sales & stock level by adding Making a sales forecast report
1 2 4
If item proportion in assortment plan is positively correlated BOTTOM-UP approach is used . If item proportion in assortment plan is negatively correlated TOP-DOWN approach is used.
Retail buyer looks for new product. Vendor evaluation on following criteria :1)Quality of goods 2)Good delivery 3)Product fashion-ability 4)Fair price 5)Styling 6)Reputation 7)Selling history 8)Steady source of supply.
It is perceived gap or discrepancy between current state and desired state of company /store. Two Major problem with which this step begins :1) Change in desired state for a store . 2) Change in current store assortment .
Internal source of Information :- Store records , merchandise plan reports , sales people opinion.
External Source of Information :a)Customer panel b)Consumer magazine & trade publication c)Vendor opinion d)Trade associations e)competitors f)Fashion forecast magazine . g) Reporting bureaus.
Qualitative Evaluation :Important aspect in evaluation is desired solution to a problem, establishing criteria of evaluation. Fiorito`s product specific criteriaKang found in her :research that retail Quality buyers and their target customer have Color similar variance Position on the fashion cycle of criteria importance and product specific Styling perceived risk Distinctiveness
Quantitative Evaluation :Its component are following : Initial markup for period Planned net sales Planned BOM(Beginning of month) Planned ending inventory (EOM) Planned reduction Planned purchases at retail.
Forecasting methods for Assortment -planning :1. Decomposition 2. Product life cycle analysis 3. Exponential Smoothing 4. Regression Analysis 5. Jury of Executives. 6. Fashion Diffusion Curve Analysis
Decomposition :- It is a sales forecast which split total sales forecast for individual forecast of each product line and SKU level by importance rating. Regression Analysis :- It is a forecast that estimate relationship between sales and external variables. Exponential Smoothing :- It is a weighted moving average of past sales with considering irregular component. Jury of executive opinion :- It is a sales forecast based on cross section of a smaller expert group .
1. Compensatory Rule :-It includes calculation of an importance weight and attribute rating for each attribute & then arrive at total product satisfaction score by adding them. 2. Lexicographic Rule :- It requires to rank the attributes according to importance & then select brand that is superior on most important attribute. 3. Conjunctive Rule :- Minimum standard is set for each attribute and then fast and simple elimination is used for selection of best alternatives.