The planning and control of merchandise inventories is to meet desired sales and product-related objectives.

Also includes the planning of the size and arrangement of the merchandise inventories, as well as a variety of functions dealing with the purchase, display, pricing, promotion, and sale of merchandise. They come up different activities that will help us the business to ensure the balance between the inventories and sales. The Marketing pit it into the right merchandise at the right place at the right time in the right quantities at the right price of each goods. Therefore, every consumer has the thought of selecting it without hindrances. The merchandise management is a process of assortment planning, developing model stock list and examines the sales. The assortment plan reflects the retailer's merchandise strategy with respect to the depth and breadth of merchandise carried in the category. Merchandise is broken down into categories for planning purposes. Buyers and their partners, merchandise planners and assorters, manage these categories, often with the help of their major vendors. In developing a sales forecast, retailers need to know what stage of the life cycle a particular category is in and whether the product is a fad, fashion, or staple item so they can plan their merchandising activities accordingly. Creating a sales forecast involves such sources of information as (1) previous sales data, (2) personal awareness, (3) fashion and trend services, (4) vendors, and (5) traditional market research. Performance measures used to assess merchandise management. Retailers use GMROI (Gross Margin Return on Investment) to plan and evaluate merchandise performance. The GMROI is tools that helps the retailer plan and evaluate the performance of the merchandise. The GMROI for a specific category of merchandise is calculated on the basis of the overall financial objectives of the retailer, which are further assigned to specific categories. The gross margin percentage in combination with the inventory turnover evolves into a useful tool for managing merchandise. The most significant issue for a retailer is determining the inventory turnover and developing inventory turnover goals. Retailers should avoid the extremes in inventory turnover rates - extremely rapid and extremely slow turnover rates. Though rapid inventory turnover is necessary for the financial success of a retailer, any attempt of the retailer to push the level of inventory turnover to the maximum will lead to frequent stock-outs and increased costs. Issues such as what merchandise to purchase and in what quantity, are of strategic significance to every retailer, especially for the multi-store retail chains of today. For decisions on these matters, a thorough plan called a merchandise

assortment plan has to be adopted. First, the merchandise is split into categories for the purpose of planning. The categories thus split are managed by purchasers and merchandise planners, as well as vendors. Thus, an assortment plan tends to be the amalgamation of the GMROI plan, the inventory turnover plan, sales forecasting, and assortment planning. The assortment plan provides the merchandise planner with a view of what the composition of a specific category of merchandise should be.

Merchandise Management Process Overview

Submitted by: Evan A. Sabillo BSBA- Marketing Management TTH 12:30-2:00 Retail Management

Submittted to: Prof. Cypress Ann Venus S. Macapagal

February 5, 2013