Sell Through Develop Inventory Using Sell Through Weekly Inv

Sell Thru Develop Inventory Using Sell Thruweekly Inventory By Sell T

Sell Thru Develop Inventory Using Sell Thru weekly Inventory By Sell T

Sell Thru % Develop Inventory Using Sell Thru Weekly Inventory by Sell T - Example LY BOW $ LY Sales $ LY Sell Thru % TY BOW $ TY Sales $ Wk 1 $2,400.6 $204.3 8.5% $2,467.6 $210.0 Wk 2 $2,526.1 $209.4 8.3% $2,593.7 $215.0 Wk 3 $2,656.4 $197.4 7.4% $3,027.8 $225.0 Wk 4 $2,907.3 $182.3 6.3% $3,269.3 $205.0 Total $793.4 $855.0 To Use Sell Thru % to calculate inventory, there needs to be sales plans **This does not take into account receipts or markdowns Week LY Sell Thru TY BOW $ Step 1 Step 2 Week 1 = Wk 1 LY Sales / Wk 1 LY BOW $ = Wk 1 TY Sales $ / Wk 1 LY Sell Thru % Week 2 = Wk 2 LY Sales / Wk 2 LY BOW $ = Wk 2 TY Sales $ / Wk 2 LY Sell Thru % Week 3 = Wk 3 LY Sales / Wk 3 LY BOW $ = Wk 3 TY Sales $ / Wk 3 LY Sell Thru % Week 4 = Wk 4 LY Sales / Wk 4 LY BOW $ = Wk 4 TY Sales $ / Wk 4 LY Sell Thru % Weekly Inventory by Sell Thru - Exercise LY BOW $ LY Sales $ LY Sell Thru % TY BOW $ TY Sales $ Wk 1 $2,243.3 $201.9 $225.0 Wk 2 $2,380.0 $202.3 $254.0 Wk 3 $2,627.6 $199.7 $215.0 Wk 4 $3,093.3 $185.6 $210.0 Total $789.5 $904.0 Plan Inventory using LY's Weekly Sell Thru Should Week 4's Sell Thru for this year increase to keep inventory down? Develop Inventory Using Sell Thru - Page 2 Monthly Inventory by Sell Thru - Example # of Weeks LY BOM $ LY Sales $ LY Month Sell Thru % LY Avg Week ST % TY BOM $ TY Sales $ Jan 4 $2,104.9 $821.5 39.0% 9.8% $2,398.3 $936.0 Feb 4 $2,463.7 $944.7 38.3% 9.6% $2,297.3 $880.9 Mar 5 $2,845.3 $963.6 33.9% 6.8% $2,543.5 $861.4 Apr 4 $2,832.6 $742.4 26.2% 6.6% $2,899.0 $759.8 Month LY Month Sell Thru LY Avg Week Sell Thru % TY BOM $ Step 1 Step 2 Step 3 Jan = Jan LY Sales $ / Jan LY BOM $ = Jan LY Month ST % / Jan # of wks = Jan TY Sales $ / Jan LY Month Sell Thru % Feb = Feb LY Sales $ / Feb LY BOM $ = Feb LY Month ST % / Feb # of wks = Feb TY Sales $ / Feb LY Month Sell Thru % Mar = Mar LY Sales $ / Mar LY BOM $ = Mar LY Month ST % / Mar # of wks = Mar TY Sales $ / Mar LY Month Sell Thru % Apr = Apr LY Sales $ / Apr LY BOM $ = Apr LY Month ST % / Apr # of wks = Apr TY Sales $ / Apr LY Month Sell Thru % Monthly Inventory by Sell Thru - Exercise # of Weeks LY BOM $ LY Sales $ LY Month Sell Thru % LY Avg Week ST % TY BOM $ TY Sales $ Jan 4 $2,243.3 $789.5 $850.0 Feb 4 $2,380.0 $907.9 $915.0 Mar 5 $2,627.6 $926.1 $937.0 Apr 4 $3,093.3 $742.4 $785.0 Plan Inventory using LY's Sell Thru Would you change any Sell Thrus for this year? Sell Thru % Answer Key Develop Inventory Using Sell Thru Week LY Sell Thru TY BOW $ Step 1 Step 2 Week 1 = Wk 1 LY Sales / Wk 1 LY BOW $ = Wk 1 TY Sales $ / Wk 1 LY Sell Thru % Week 2 = Wk 2 LY Sales / Wk 2 LY BOW $ = Wk 2 TY Sales $ / Wk 2 LY Sell Thru % Week 3 = Wk 3 LY Sales / Wk 3 LY BOW $ = Wk 3 TY Sales $ / Wk 3 LY Sell Thru % Week 4 = Wk 4 LY Sales / Wk 4 LY BOW $ = Wk 4 TY Sales $ / Wk 4 LY Sell Thru % Weekly Inventory by Sell Thru - Exercise LY BOW $ LY Sales $ LY Sell Thru % TY BOW $ TY Sales $ Wk 1 $2,243.3 $201.9 9.0% $2,500.0 $225.0 Wk 2 $2,380.0 $202.3 8.5% $2,988.2 $254.0 Wk 3 $2,627.6 $199.7 7.6% $2,828.9 $215.0 Wk 4 $3,093.3 $185.6 6.0% $3,500.0 $210.0 Total $789.5 $904.0 Plan Inventory using LY's Weekly Sell Thru Should Week 4's Sell Thru for this year increase to keep inventory down? Develop Inventory Using Sell Thru - Page 2 Month LY Month Sell Thru LY Avg Week Sell Thru % TY BOM $ Step 1 Step 2 Step 3 Jan = Jan LY Sales $ / Jan LY BOM $ = Jan LY Month ST % / Jan # of wks = Jan TY Sales $ / Jan LY Month Sell Thru % Feb = Feb LY Sales $ / Feb LY BOM $ = Feb LY Month ST % / Feb # of wks = Feb TY Sales $ / Feb LY Month Sell Thru % Mar = Mar LY Sales $ / Mar LY BOM $ = Mar LY Month ST % / Mar # of wks = Mar TY Sales $ / Mar LY Month Sell Thru % Apr = Apr LY Sales $ / Apr LY BOM $ = Apr LY Month ST % / Apr # of wks = Apr TY Sales $ / Apr LY Month Sell Thru % Monthly Inventory by Sell Thru - Exercise # of Weeks LY BOM $ LY Sales $ LY Month Sell Thru % LY Avg Week ST % TY BOM $ TY Sales $ Jan 4 $2,243.3 $789.5 $850.0 Feb 4 $2,380.0 $907.9 $915.0 Mar 5 $2,627.6 $926.1 $937.0 Apr 4 $3,093.3 $742.4 $785.0 Plan Inventory using LY's Sell Thru Would you change any Sell Thrus for this year?

Paper For Above instruction

The effective management of inventory is critical for retail success, particularly in an environment driven by fluctuating sales and seasonality. To optimize stock levels and ensure a seamless supply chain, retailers often rely on various inventory planning techniques such as Sell Thru analysis, Weeks of Supply (WOS), and Receipts planning. In this paper, we explore how to develop inventory planning strategies using Sell Thru metrics and other key indicators, exemplified through detailed calculations based on historical data. These techniques enable retailers to forecast inventory needs, adjust merchandising strategies, and minimize surplus stock while maximizing sales potential.

Understanding Sell Thru and Its Application in Inventory Planning

Sell Thru percentage, a fundamental metric in retail, indicates the proportion of inventory sold during a specific period relative to the starting stock. Mathematically, Sell Thru is expressed as:

\[

\text{Sell Thru %} = \left( \frac{\text{Sales}}{\text{Beginning of Week (BOW)}} \right) \times 100

\]

This percentage offers insights into product performance, shelf life, and demand elasticity. By analyzing past Sell Thru rates, retailers can develop more accurate sales forecasts and assign appropriate inventory levels for upcoming periods.

Weekly Sell Thru Analysis for Inventory Development

Utilizing weekly data, retailers can determine the Optimal Inventory Level by dividing forecasted sales by the expected Sell Thru rate. For instance, if last year's Week 1 Sell Thru was 8.5% with a corresponding sales figure of $204.3 against a BOW of $2,400.6, then the ideal inventory for this week can be calculated as:

\[

\text{Desired Inventory} = \frac{\text{Forecasted Sales}}{\text{Sell Thru %}} = \frac{\$210.0}{0.085} \approx \$2,470

\]

Applying this approach across weekly data points allows for dynamic adjustment of inventory to meet expected demand, reducing overstocking or stockouts.

Monthly Inventory Planning Based on Historical Data

Monthly analysis incorporates aggregate sales, average weekly Sell Thru rates, and planned markdowns. For example, the first quarter data demonstrates variation in Sell Thru%, with January at 39% and April at 26.2%. Recognizing these trends, planners may refine their stock allocations by considering the monthly Sell Thru and adjusting the BOM accordingly. Such adjustments help align inventory levels with actual market dynamics, ensuring optimal stock turnover rates and minimized excess inventory.

Incorporating Weeks of Supply (WOS) and Receipt Planning

Besides Sell Thru, Weeks of Supply (WOS) provides another perspective. WOS measures how long the current inventory will last based on current sales rates. Calculations involve dividing the inventory (EOM) by weekly sales:

\[

\text{WOS} = \frac{\text{Ending Inventory}}{\text{Weekly Sales}}

\]

Retailers can adjust WOS targets based on product lifecycle, seasonality, and sales trends. For example, if WOS appears too long, increasing receipts or reducing inventory levels may be necessary.

Receipt Planning and Inventory Turnover Optimization

Receipt planning focuses on replenishment quantities to maintain desired inventory levels while accommodating fluctuating sales. Using past BOM data and sales trends, planners forecast future receipts. Additionally, they can manipulate receipt quantities to influence inventory turnover rates—either increasing receipts to decrease turnover time or decreasing receipts to extend WOS. Such strategies must be aligned with sales projections and markdown expectations.

Conclusion

Effective inventory management hinges on accurate sales forecasting, diligent analysis of Sell Thru, and strategic planning of receipts and WOS. By leveraging historical sales and inventory data, retailers can develop responsive plans that minimize excess stock, optimize turnover, and maximize profitability. Employing these quantitative tools fosters a more agile supply chain capable of adapting to market demands and seasonal fluctuations, ultimately supporting sustained retail success.

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