You are on page 1of 14

Unit

Category Role
Purchase Decision Hierarchy
Average Purchase price
$
Average Sale Price
$
Inventory
Pieces
Monthly quantity sold
Pieces
Shelf space allocated
Ft
Time spent by sales person
No of hrs
Payment terms for vendors
Days

Kanchipuram Silk
Destination
Flagship
123.08
162.97
970
648
25
3
30

Benaras Silk
Speciality
Cash Machines
110.58
146.42
415
261
20
1
90

Embroidery
Speciality
Grow Margin
112.5
148.96
286
187
15
1
45

Monthly Revenue
Monthly Purchase Cost
Absolute margin
Total Margin

$
$
$
$

105604.56
79755.84
39.89
25848.72

38215.62
28861.38
35.84
9354.24

27855.52
21037.5
36.46
6818.02

Margin %
Stock unsold
% shelf space allocated

%
Pieces
%

32.4
322
20

32.4
154
16

32.4
99
12

Days
$

44.90740741
79755.84

47.70114943
9620.46

45.88235294
14025

Revenue/ Shelf space


Abs Margin/ Shelf space

$/ ft
$/ ft

4224.1824
1033.9488

1910.781
467.712

1857.034667
454.5346667

GMROF
GMROI

$/ft
$/ft

1368.635098
1033.635686
51.80653445
13783.04

619.093044
467.554356
18.74731778
7675.08

601.679232
454.41
13.66520582
4319.48

Inventory Turnover Ratio


Avg Accounts Payable

Credit

Cotton
Routine
Cash Machines
14.23
18.84
2860
1938
30.25
1
15

Ready to stitch
Convenience
Grow Margin
12.98
17.19
2222
1435
10
0.5
15

Materials
Convenience
Core Traffic
4.81
6.37
4650
3229
20
1.5
30

Dhotis
Convenience
Grow Sales
12.98
17.19
135
75
4.75
0
15

36511.92
27577.74
4.61
8934.18

24667.65
18626.3
4.21
6041.35

20568.73
15531.49
1.56
5037.24

1289.25
973.5
4.21
315.75

32.4
922
24.2

32.4
787
8

32.4
1421
16

32.4
60
3.8

44.27244582
55155.48

46.45296167
37252.6

43.20222979
15531.49

54
1947

1207.00562
295.3447934

2466.765
604.135

1028.4365
251.862

271.4210526
66.47368421

391.0698208
295.3781078
17.91351126
4185.88

799.23186
603.49212
12.09897674
4173.91

333.213426
251.610138
10.08869911
1797.77

87.94042105
66.40294737
0.6323507
463.05

125

254713.25
192363.75
62349.5

213287.87
2037.706

498.796
36398.21

125

Cost Plus Pricing Scheme

Good Inventory Maintenance

Annual Costs
Rent
181,731.00
Salary
64,904.00
Utilities 112,404.00
Other costs 33,269.00
Total
392,308.00

P & L on monthly basis


Revenue
Cost of Goods Sold
Contribution
Expenses
Profit
Profit/Revenue

Their markup of 32% reduces just to 12%, displaying


of the cost required to get them to the shelf in addi

2010
254713.25
192363.75
62349.5
32,692.33
29,657.17
0.12

educes just to 12%, displaying the inefficient pricing mechanism of constant markup for all products inspite
get them to the shelf in addition to the purchase cost

Shelf Space Apportioning


Unit Kanchipuram Silk
Monthly Revenue $
105604.56
Monthly Purchase Cost
$
79755.84
Shelf Space
ft
25
Revenue/Shelf Space
Rs./ft
New Shelf Space Ft
New Revenue/ShelfRs./ft
space

Benaras Silk
38215.62
28861.38
20

Embroidery
27855.52
21037.5
15

Cotton
36511.92
27577.74
30.25

4224.1824

1910.781

1857.034667

1207.00562

51.5
2050.573981

18.5
2065.709189

13.5
2063.371852

17.5
2086.395429

Kanchi Silk - Double the space would make the shelf look almost empty
Cotton & Materials - Halfing the space would make it would look cumbersome & make customers f

Ready to stitch
24667.65
18626.3
10

Materials
20568.73
15531.49
20

Dhotis
1289.25
973.5
4.75

254713.25
192363.75
125

2466.765

1028.4365

271.4210526

2037.706

12
2055.6375

9.5
2165.129474

0.632696768
2037.706

123.1326968

cumbersome & make customers feel not to return for an another purchase

Unit
Category Role
Purchase Decision Hierarchy
Average Purchase price
$
Average Sale Price
$
Inventory
Pieces
Monthly quantity sold
Pieces
Shelf space allocated
Ft
Time spent by sales personNo of hrs
Payment terms for vendors Days
Sales Cost for a
product

Utility Apportionment
based on Shelf Space

Kanchipuram Silk
Destination
Flagship
123.08
162.97
970
648
25
3
30

Benaras Silk
Speciality
Cash Machines
110.58
146.42
415
261
20
1
90

Embroidery
Speciality
Grow Margin
112.5
148.96
286
187
15
1
45

2.335858586

0.778619529

0.778619529

749.36

599.488

449.616

1.156419753

2.296888889

2.404363636

New Avg Sale Price

126.5722783

113.6555084

115.6829832

New Sale Price


New Revenue

$
$

167.5816965
108592.9393

150.4798931
39275.25211

153.1642697
28641.71844

New P & L
Revenue
Cost
Contribution
Expenses
Profit

269846.9235
192363.75
77483.1735
32692.33333
44790.84017

Profit/Revenue

0.165986106

Utility Apportionment
/ piece

Cotton
Routine
Cash Machines
14.23
18.84
2860
1938
30.25
1
15

Ready to stitch
Convenience
Grow Margin
12.98
17.19
2222
1435
10
0.5
15

Materials
Convenience
Core Traffic
4.81
6.37
4650
3229
20
1.5
30

Dhotis
Convenience
Grow Sales
12.98
17.19
135
75
4.75
0
15

0.778619529

0.389309764

1.167929293

906.7256

299.744

599.488

142.3784

0.467866667

0.208880836

0.185657479

1.898378667

15.4764862

13.5781906

6.163586772

14.87837867

20.49086772
39711.30165

17.97752436
25797.74745

8.160588886
26350.54151

19.69897335
1477.423002

Salary
Sales Staff
Admin
Others

125

30
3
2

Cost of labor per day


Cost of labor per hour
Utilities

Pro rata Apportioning


Cost

112404

Per day cost


Apportioning based on Shelf space

269846.9235

3746.8

Annual Salary
1850
2350
1200

55500
7050
2400
64950

Year
264
Labor hrs / day

7.007575758
0.778619529

9
Total Labor Hrs
2376

Unit
Category Role
Purchase Decision Hierarchy
Average Purchase price
$
Average Sale Price
$
Inventory
Pieces
Monthly quantity sold
Pieces
Shelf space allocated
Ft
Time spent by sales person
No of hrs
Payment terms for vendors
Days

Kanchipuram Silk
Destination
Flagship
123.08
162.97
970
770
29.75
3
30

Benaras Silk
Speciality
Cash Machines
110.58
146.42
415
261
20
1
90

Embroidery
Speciality
Grow Margin
112.5
148.96
286
187
15
1
45

Monthly Revenue
Monthly Purchase Cost
Absolute margin
Total Margin

$
$
$
$

125486.9
94771.6
39.89
30715.3

38215.62
28861.38
35.84
9354.24

27855.52
21037.5
36.46
6818.02

Margin %
Stock unsold
% shelf space allocated

%
Pieces
%

32.4
200
23.8

32.4
154
16

32.4
99
12

Days
$

37.79220779
94771.6

47.70114943
9620.46

45.88235294
14025

Revenue/ Shelf space


Abs Margin/ Shelf space

$/ ft
$/ ft

4218.047059
1032.447059

1910.781
467.712

1857.034667
454.5346667

GMROF
GMROI
GMROL

$/ft
$/ft
$/hr

1366.647247
1032.1344

619.093044
467.554356

601.679232
454.41

Inventory Turnover Ratio


Avg Accounts Payable

Cotton
Routine
Cash Machines
14.23
18.84
2860
1938
30.25
1
15

Ready to stitch
Convenience
Grow Margin
12.98
17.19
2222
1435
10
0.5
15

Materials
Convenience
Core Traffic
4.81
6.37
4650
3229
20
1.5
30

36511.92
27577.74
4.61
8934.18

24667.65
18626.3
4.21
6041.35

20568.73
15531.49
1.56
5037.24

32.4
922
24.2

32.4
787
8

32.4
1421
16

44.27244582
55155.48

46.45296167
37252.6

43.20222979
15531.49

1207.00562
295.3447934

2466.765
604.135

1028.4365
251.862

391.0698208
295.3781078

799.23186
603.49212

333.213426
251.610138

Kanchi Units Inc


0.188271605
125

273306.34
206406.01

226356.63
2186.45072

Growth
0.113360324
125

Revenue Increase %
0.06127287