Demand forecasting is a critical part of the entire merchandise lifecycle, as the accuracy and timeliness of your forecasts will set the course for the entire selling season. Having a merchandise plan is critical for the success of every retail business. Merchandise planning step by step process 1. Consistently having the right quantities of the right product in the right place at the right price and at the right time is a cornerstone of effective retail merchandising. Merchandise planning is a systematic approach to planning, buying, and selling merchandise to maximize your return on investment (ROI) while simultaneously making merchandise available at the places, times, prices and quantities that the market demands. Accurate demand forecasting is essential for a firm to enable it to produce the required quantities at the right time and arrange well in advance for the various factors of production e.g., raw materials, equipment, machine accessories etc. Sales forecasting is a key element in conducting your business. People generally make short-term forecasts for operational reasons. Top 10 Reasons Why Sales Forecasting Is Important. Without proper demand forecasting processes in place, it can be nearly impossible to have the right amount of stock on hand at any given time. Forecasting. Stitch Labs is a retail operations management platform for high-growth brands. This forecasting model factors in your business financing, cash on hand, profit margins, supply chain operations, and personnel. Accurately anticipating demand and aligning stock positions to those demand forecasts can … MARGIN SALES & FORECASTING OPEN TO BUY Merchandising INVENTORY Process MANAGEMENT PERFORMANCE ANALYSIS STOCK ALLOCATION DISTRIBUTION LOCATIONS People FINANCE SUPPLY CHAIN Influences MANAGEMENT REPORTING POS Systems SUPPLIERS MARKETING MERCHANDISING 2. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Assortment plans must determine the ideal product ranges and price lines for each unique location, channel and customer segment. Forecasting helps a firm to access the probable demand for its products and plan its production accordingly. Forecasting is a projection of what is going to happen at a much higher level and includes revenue items, overall expenses, and other business components. Internal business demand forecasting is a helpful tool for making realistic projections. Merchandise allocation is the process of determining how to distribute merchandise to individual store units for maximum sales and minimal markdowns. Start studying chapter 12: managing the merchandise planning process. Forecasts may be short- or long-term. The realism that good forecasting provides can help you develop and improve your strategic plans by increasing your knowledge of the marketplace. Merchandise financial and assortment plans represent the foundation upon which successful merchandise lifecycles are built. Inventory, markdown and profit targets must be established at the start of every planning cycle. Demand forecasting is a key component to every growing retail business. Depending on the size and sophistication of the retail operation, this can be a simple process, or an extremely complex algorithmic exercise. Retail Merchandise Budgeting. It can also point you toward areas where you need to build capacity in order to meet expansion goals. 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