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Manohar Pandit
Avg Monthly sales = 160,000/6 = Rs.26,667 (Sales for season/No. months in season)
BOM Stock = 20,000+(40,000-26,667) (Sales for month + Basic stock)
= 20,000+ 13,333
= Rs. 33,3233
If stock turnover of 10 times is desired then how many weeks supply should
be on hand at all times?
Weeks Supply
= 52 weeks/desired stock turnover
= 52 weeks/10
= 5.2 weeks supply needed on hand every week
Determine Sales Stock Ratio when BOM stock is Rs.50,000 and retail
sales are Rs.35,000?
Stocks-Sales Ratio = Rs.50,000 / Rs. 35,00
= 1.4286
The stores must have merchandise of Rs.143 in order to sell worth
Rs.100
The stores has planned sales of Rs.60,000 for the month of Apr.
Past records indicate a stocks-sales ratio of 5.4. What should
be the planned BOM stock for Apr?
BOM Stock = Planned Monthly Sales X Stocks-Sales Ratio
= Rs.60,000 X 5.4
= Rs. 324,000
Planning Reductions
Reductions reduce retail value of the inventory and include
markdowns, discounts to employees and customers,
and stock shortages
In developing merchandise plan reduction percents are
estimated on the basis of past experience as well as
current factors that may increase or decrease those
percents. Reductions must be realistic.
Reductions are expressed as a percent of net sales
Planned Sales
Planned BOM Stock
Planned Markdown
12,500
42,000
1,900
17,400
39,000
2,800
19,000
43,000
2,200
20,500
44,000
1,600
Solution
Planned Purchases at Retail
= Sales + EOM Stock + Markdowns + BOM Stock
Jun
Jul
Planned Sales
12,500
17,400
+ Planned EOM Stock
39,000
43,000
+ Planned Markdowns
1,900
2,800
- Planned BOM Stock
-42,000
-39,000
Planned Purchases
11,400
Aug
19,000
44,000
2,200
-43,000
24,200
22,200