Chapter 10 Formulas:
|
Metric |
Formula |
|
GMROI |
= (Gross Margin / Net Sales ) x (Net Sales / Average Inventory) = Gross Margin % x Sales-to-stock ratio = Gross Margin / Average Inventory |
|
Stock to Sales Ratio |
= Planned sales for month / BOM Stock |
|
Inventory Turnover |
= Net Sales / Average Inventory |
|
Planned Purchases |
= Planned Sales + Reductions + EOM inventory – BOM inventory |
|
Open To Buy |
= Actual EOM planned – Projected EOM inventory |
|
Projected EOM Inventory |
= Actual BOM inventory + New Received + On Order – Planned Sales – Reductions |
Fill in the blanks
|
GMROI (%) |
Gross Margin ($) |
Average Inventory ($) |
|
75% |
156,000 |
|
|
680,000 |
450,000 |
|
|
20% |
71,500 |
Fill in the blanks
|
Planned Sales ($) |
BOM Inventory ($) |
Stock to Sales Ratio (times) |
|
56,000 |
7 |
|
|
466,500 |
2.5 |
|
|
36,000 |
45,000 |
Fill in the blanks
|
Net Sales ($) |
Average Inventory ($) |
Inventory Turnover (times) |
|
613,750 |
552,375 |
|
|
72,000 |
6.93 |
|
|
350,000 |
2.8 |
BurgerBar have net sales of $384,375 for 2013. The inventory turnover has traditionally been 10.25. What is their average inventory?
MiniCinno, a coffee shop, has planned sales of $40,000 for the month of April. They are expecting $920 in reductions. If their inventory starts the month at $3,600 and ends the month at $5,200 what are the planned purchases for the month of April?
The owners of Bob’s TV started the month of May with $975,000 worth of inventory. They have $575,000 of planned sales for the month of May. They are half way through the month and have received $125,000 of new inventory and are anticipating another $245,000 of inventory on order to arrive before the end of the month. A) What is their projected inventory at the end of the month (EOM)?
B) Assume the Projected EOM inventory from part A becomes the Actual EOM. If they had projected to have $790,000 at the end of the month then what is their Open to Buy?
Under-the-Radar, an independent electronics store, is planning on $561,000 in sales. They are starting their month of September with $140,250 of inventory. What is their stock to sales ratio?
AnglersDirect, an online retailer of fishing equipment and supplies planning on sales of $225,000 for the month of November. On November 12th they had received $62,000 of their placed orders and were anticipating a further $166,000 before the month was out. On Nov 1st they had $199,000 of inventory in the warehouse and were planning on having $195,000 on Nov 30th. What is their open to buy on Nov 12th ?
