Explain the five major merchandising decisions that a retailer ...

[schs14]

Explain the five major merchandising decisions that a retailer must make when developing the merchandise budget. Why is a merchandising budget so important?

Question 2

If a retailer cannot offer the same services as its competitors:
 a. it should not worry about competitors' services.
  b. it should no longer consider them to be competitors.
  c. it could move to a different trading area.
  d. it could discontinue offering any services.
  e. it could offer lower prices.

[ecox1012]

Answer to Question 1

In developing the merchandise budget, the retailer must work on the five major merchandising decisions:
 The anticipated sales for the department, division, or store.
 The stock needed on hand to achieve this sales plan, given the level of inventory turnover expected.
 The likely reductions, if any, from the original retail price in order to dispose of all merchandise brought into the store.
 Additional purchases to be made during the season.
 The gross margin the department, division, or store is likely to contribute to the overall profitability of the company, given this merchandising plan.

The merchandising budget projects sales, when and how much new merchandise should be ordered, what markup is to be taken, what reductions are to be planned, and the target or planned gross margin for the season. All of which are imperative to the success of any retail business.

Answer to Question 2

E

[schs14]

Excellent

[amandalm]

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