MANAGEMENT APPROACH

Policy established on slow-moving or problem-oriented products.

Merchandise new products, high gross profit items and stage location to feature what you want to sell

Operating Strategy

Review product pruning candidates at least annually and dispose of low R.O.l. products.

Keep displays clean & fresh, change frequently, watch T/O "Front End" items, feature your winners - and losers (until out ofstock).

Failure to properly use wholesaler

. Don't know product gross profit rate o Don't know product turnover o The "bargain" buy

. Don't know product R.O.l.

Use wholesaler inventory as your own - keep stock to overlap delivery schedule of wholesaler bv 2-3 (X).

Determine rate for all products and use replacement cost markup on cost rncreases.

Establish turnover sheet by product and evaluate quarterly.

Determine gross profit on average inventory investment using annual data as initial information.

Determine why it is a bargain and length of time it will probably be in inventory.