Merchandising Plan Calculations

MERCHANDISING PLAN CALCULATIONS for NOVEMBER

The following calculations represent the ratios for the six month merchandising plan. Planned Sales $ Monthly Planned Sales ($) = LY Monthly Sales % * Season Total Planned Sales for November = 18% * $75,000 =

$13,500

Retail Stock (BOM) BOM Retail Stock = Stock to Sales Ratio for Month * Monthly Planned Sales BOM Retail Stock for November = 2.0 * $13,500 =

$27,000

Markdowns Markdown $ = Markdown % * Monthly Planned Sales Markdown $ for November = 15% * $13,500 =

$2,025

Planned Retail Purchases Planned Retail Purchases = Planned Sales $ + Markdowns + EOM – BOM Planned Retail Purchases for November = $13,500+ $2,025 + $37,500 - $27,000 = $26,025

Planned Purchases at Cost Planned Purchases at Cost = Planned Retail Purchases * (100% - Markup Percentage) Planned Purchases at Cost for November = $26,025 * (40%) = $10,410

EOM Inventory EOM = Retail Stock BOM of the next month Dec BOM = $37,500 Nov EOM = $37,500

Total Stock to Sales Ratio Total Stock to Sales Ratio = Value of Stock BOM / Total Sales Total Stock to Sales Ratio for the entire season = $182,775 / $75,000 = 2.4

After analyzing this data and understanding the value of each calculation, we can deduce that Free People’s budget for November of 2021 is $26,025.00.