15-1

Merchandise Plans

Selecting Merchandise Sources

Company-owned
Eg- Vishal
Outside supplier

15-2

Figure 15-4:
A Checklist
in
Choosing
Vendors

15-3

Negotiating the Purchase

Special considerations
* Opportunistic buying-discount retailers
negotiate low prices for merchandise
whose sales have not lived upto
expectation,end of season goods
* Slotting allowances- large retailers ask for
amount from suppliers for shelf space

15-4

Stocking merchandise
RFID-radio frequency identification
technology involving transponders .Tags
are attached to the merchandise which are
read using transponders

15-5

Figure 15-6: Receiving and Stocking

Merchandise at Category Killer Stores

15-6

Reordering Merchandise

15-7

Four critical factors:

* Order processing time of retailer and delivery time of supplier
* Inventory turnover by retailer. Slow moving goods less inventory
* Financial outlays- large order more cash outlay
* Inventory versus ordering costs Trade offs to be made b/w
inventory cost and ordering cost.Large inventory means large
discount ,low per item transportation cost but it also means high
storage cost,Low inventory means low inventory cost ,low storage
cost but higher unit cost,order delays,customer dissatisfaction

Order Processing and

Fulfillment

15-8

Quick Response Inventory Planning (QR)- ordering more

frequently in less quantity
Floor-ready merchandise- items received are in state that
can be readily displayed .So in this case the manufacturer
pre ticket the items as required by retailer. Eg in case of
apparel
Efficient Consumer Response (ECR)-QR+electronic data
interchange and logistic planning done collaboratively by
manufacturer,retailer distributor so that a continuous flow
of products is there to match consumption
Eg Food retailing