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FAS 2245 Open-to-Buy Project
CREATING A FASHION RETAIL STORE
Part A (60%)
As a buyer for XYZ retail store you will choose a classification of merchandise that you would like to buy. You will decide where your store will be located and what type of store it will be. This information will be backed up by valid research and trend information. Once you have decided on the type of merchandise you want to carry and have developed a name for the store and location (city and state), you will have $1,236,000 (Retail) and $618,000 (Cost) to spend to stock your store.
This money will be your open-to-buy (OTB) for the season and we will use the Fall/Winter* season which will encompass Aug., Sept., Oct., Nov., Dec., and Jan. as there is information that is readily available. You will detail down to the SKU level,* what your department will consist of and how you plan your inventory flow. We will discuss this in more detail as the course progresses. The written portion of the project will be a minimum of four typed double spaced pages discussing the process, your research, and why you chose the product classification that you did; the balance of the project will be numbers based. The MLA format for documentation is required, including in-text citations where needed and a Works Cited page at the end. Once you determine the product category a 50% markup will be used to determine the cost of the merchandise that you will need to buy.
*When illustrating your SKUs please be sure this is shown right after the four page discussion portion of the project. Your SKUs should also be typed. You should have approximately 3 to 4 pages of SKUs for each month (you may decide to have more based on the merchandise mix for your store).
Using the figures provided you will calculate the following for the XYZ store.
B1. Open to buy for each month
B2. Average monthly sales
B3. Average monthly on order
B4. Markdown % for each month
+ Planned reductions
+Planned EOM Stock
= Total monthly needs
-Merchandise on order
=Open to buy (At Retail)
Planned sales On order Employee MD$ Shortages EOM BOM
Aug. $300,000 $125,000 2% $8,000 2% $200,000 $160,000
Sept. $200,000 $15,000 3% $12,000 4% $80,000 $200,000
Oct. $300,000 $145,000 4% $4,000 5% $110,000 $80,000
Nov. $200,000 $35,000 0% $3,000 7% $90,000 $110,000
Dec. $400,000 $170,000 5% $18,000 2% $210,000 $90,000
Jan. $250,000 $24,000 7% $25,000 3% $70,000 $210,000
Part C. Solve the following:
C1. After careful analysis of the economic data from the U. S. Government the XYZ store set a sales plan increase for the next season (Aug .- Jan) of 6.2%. Based on this year's sales plan what is the company's new projected sales plan for the next season?
C2. In the prior year same sales period the XYZ store had actual sales of $1,820,000.00. What was the increase/decrease for the sales period and suggest reasons for the change from one season to the next.
(Parts B and C are worth 40%)
*In Fashion retailing, the business cycles usually end on July 31 and January 31. Business cycles in retailing (especially for apparel) are generally known as seasons. The February through July business cycle is called the Spring/Summer season, and the August through January business cycle is called the Fall/Winter season.