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lo_12-4_video.pptx12-4 what is gmroi and sales-to-stock?
Evaluating Merchandise Management Performance
Merchandise managers have control over
The merchandise they buy
The cost of the merchandise
The price at which the merchandise is sold
Merchandise managers do not have control over
Operating expenses
Interest, taxes, depreciation
Human resources
Supply chain management
Information systems
SO HOW ARE MERCHANDISE MANAGERS EVALUATED?
2
Sales-to-stock ratio
Calculate sales-to-stock ratio
Sales-to-stock ratio
Retailers report on a annual basis
If you have EOM inventory numbers (which buyers would), calculate the average inventory at cost. If calculating for the year, you can use cost of inventory recorded on the balance sheet.
If sales-to-stock ratio for a three month season is 2.3, what is the estimated sales-to-stock ratio for the year?
12-4 what is gmroi? (Gross margin return on inventory)
GMROI = Gross Margin Percent x sales-to-stock ratio
Calculate GMROI
ROA and GMROI Asset productivity measures
STRATEGIC CORPORATE LEVEL
MERCHANDISE MANAGEMENT LEVEL
