Case Synopsis, Uses, Discussion Questions, and Answers
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CASE 24 Preparing a Merchandise Budget Plan
Synopsis: This is a difficult case for students to grasp, but we think it is well worth the trouble
because it illustrates the relationship between the sales forecast, the seasonality pattern,
Use:
Chapter 11 Managing the Merchandise Planning Process
Student Instructions
Your assignment is to assist Jim in the preparation of a merchandise budget plan. First, fill
out the merchandise budget form for six months. You may use either the form
I. Sales forecast
.19 to account for the 19 percent increase in sales
II. Adjustments to percentage distribution of sales by month
equally important in forecasting next year. They also might want to use the most current year, which
III. Stock-to-Sales ratios
Given the GMROI and gross margin plans, the projected average stock-to-sales ratio is 1.58.
Remember, to get the projected average stock-to-sales ratio for this 6-month period, you take
6/inventory turnover, not 12/inventory turnover.
Case Synopsis, Uses, Discussion Questions, and Answers
63
The industry averages from the NRF are given, but each month needs to be adjusted so that they
average 1.58. First, we must make the adjustment to the March, April, and May stock-to-sales ratio.
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