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CASE 23 Developing an Assortment Plan for Hughes
Synopsis: A department store needs to develop an assortment plan for imported merchandise.
Use:
Chapter 11 This case gives students an excellent chance to experience how a buyer must break
down an open-to-buy allocation into SKU’s, specifically sizes and fabrics of oriental
Discussion Questions
1. Work up a buying plan to use when buying from Ghuman’s.
Decide how to distribute the allotted open-to-buy dollars among the available sizes, colors, and
2. How should Hughes distribute the allotted open-to-buy dollars among the
available sizes, colors, and fabrics?
Exhibits 2,3, and 4 are sample assortment plans for silk, wool, and cotton, respectively. They were
developed from one large spreadsheet. For purposes of illustration, we will examine the assumptions
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60
Column 6 is the adjusted number of SKUs. Naturally, the buyer cannot purchase 4.56 rugs.
So adjustments are made, both up and down, to whole numbers. In this case, we adjusted
upward to 5 units.
Exhibit 1 Cost Information
SILK
COST
WOOL
COST
COTTON
COST
SILK
COST
ADJUSTED
WOOL
COST
ADJUSTED
COTTON
COST
ADJUSTED
400 250 436 0 272.5
Exhibit 2 Assortment Plan for Silk Rugs
SIZES % OF
SALES
SILK % SILK $ SILK
UNITS
SILK UNITS
ADJUSTED
SILK $
ADJUSTE
D
0.2 0.03 1986
4.56 5 2180
Exhibit 3 Assortment Plan for Wool Rugs
SIZES % OF
SALES
WOOL
%
WOOL $ WOOL
UNITS
WOOL
UNITS
ADJUSTED
WOOL $
ADJUSTE
D
Exhibit 4 Assortment Plan for Cotton Rugs
SIZES % OF
SALES
COTTO
N %
COTTO
N $
COTTON
UNITS
COTTON
UNITS
ADJUSTED
COTTON
$
ADJUSTE
D
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0.2 0 0 0.00 0 0
0.4 0.1 6620 30.37 30 6540