timer Asked: Apr 10th, 2014

Question Description


Need a 75 words discussion Unit 2 Fayette Lands 4/8/2014 10:28:02 PM I am in retail management and there are two formulas that I used daily and monthly to project profit for my store, increase profits, and protect my bottom line from shrink and lost in sells. (1) and (2) They are: Profit Percentage Formula(used to determine how much profit I can make off of an item and what location I stand to make the biggest impact) Retail-Cost/Retail Example: An As Seen On TV item $10.99-$5.00/$10.99. This item will give me 55% gross profit that I can make from each sale. Meaning that my store makes $5.99 for an item that only cost the store $5.00. So I broke even and made a profit.The second is Open To Buy (OTB). OTB=Planned Sales+Planned Markdown+Planned End of Month Inventory-Planned Beginning of Month Inventory(this gives you a forecast of what you are open to buy so that you do not under buy and miss out on sales or over buy and end up with an extreme amount of inventory to carry over.)Definition: Merchandise budgeted for purchase during a certain time period that has not yet been ordered. It is also the process of planning merchandise sales and purchases. Example: if my store has an inventory to start April 1st off with 250,000 and I planned to have 255,000 on April 30th. My planned sales for my store are 50,000 and planned markdowns are $500. My Open To Buy for my store is $55,500. (3) The advantages of using these formulas are basic loss prevention for your store. You learn to work wise instead of hard when you plan your store for success. Every store lifeline is profit and most fall under because the don't plan well enough. Difficulties in using the formulas I find is the lack of understanding of planning and forecasting in business. These formulas are foreign if you don't plan. This is like your blueprint for profit. (4) I honestly can not think of a field that doesn't operate off of some formula to make money or progress. In order to operate I think you have to have a goal and a way to get to it. That involves some form of planning and formula in my opinion.

This question has not been answered.

Create a free account to get help with this and any other question!

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors