JAIPURIA INSTITUTE OF MANAGEMENT, LUCKNOW

PGDM/FS/RM
th
5 Trimester (Batch2019-21)
Repeat / Improvement Examinations

Course Name Merchandise buying Course Code

Max. Time 2 Hours Max. Marks 40

Instructions: ………………………………………………………………...…………………………

Total marks 40 marks

Question 1)For a large national fashion store chain"Stylemax",You are the national merchandise buyer for
Ladies western wear category.

For the Buying of the new spring summer 2020 collection of ladies western wear, the planning has started
6 months in advance. There is a thorough deep dive into the way that the category has performed in last
year, the analysis showed that there were many gap areas in buying function, that led to severe year on
year sales degrowth of 18%. The targets ate very steep for the new year With theExpectations of a
complete turn around in sales in margins both.
The category initially operatedwith two vendors :
1) vendor "gaatha sales" - contributed to 65% of category sales, but degrowing by 10% every year, as no
new range additions have come from the vendor. Also vendor struggle with timely dispatches. Last year,
the shipment delay was by 2 weeks, which led to multiple PO stock being dumped in one go. The stores
which were earlier stock out, suddenly were flooded with stocks.

2) vendor "pransh sales" - launched 2 years ago, this new vendor contribute to remaining 35% , but has
been doubling it's sales every year. This vendor also contribute 10% more margin than "gaatha"
With immediate turnaround expected, you begin chalking out plans for SS20, where you have been given
below tasks by theSenior management

1) Create a framework for vendor segmentation on the basis of their contribution to sales & margins.
Also list the down the basic set of KPIs that must be incorporated in the vendor scorecard to
evaluate each vendor On the basis of their performance.

10marks
2) To bring about innovation in the category, you are also looking at introducing new vendors. For
this purpose you have shortlisted 3 new possible vendors. Design a Basic guidelineof basic 5 rules,
which will Be the roadmap for how should select a new vendor Amongst the 3 shortlisted.

5 Marks

3) As part of the new season planning, you are having a review meeting with each vendor. Prepare a
draft illustratingthe negotiations tactics which you will use so that each vendor increases their
productivity in the new Calenderyear and especially new season SS20 Arrival.
5 marks
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 4) As part of the mid year discussions, vendor "gaatha sales" complained of delayed payment and
how it has effected vendor production line. To resolve this, you take up this concern with the CFO
of Style Max. Prepare a draft which outlines the 5 key roles of timely payments in function of
merchandise buying and how it can improve fill rates and ontime availability.

5 marks

Question 2)
a) Define assortment planning and what all important individual product attributes must be evaluated
during planning of assortment?

5 marks

b) Elaborate the critical role of accurate assortment planning in the merchandise buying function

5 marks

question 3) You are the category manager for Croma and are faced with a difficult situation to choose
between various brands for your small size stores, especially for your mobile phone category. You then rely
on the theory of transferrable demand to prioritize between brands and create a rationalized buying plan.

Describe the Theory of Transferrable Demand and its implementation in category creation.
Also elaborate the usage of this theory in cases where:
a) brands show high level of loyalty
b) brands show high level of exclusivity.

Illustrate your answer by taking examples from the mobile phone category.
10 marks

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