Chapter 12 - Merchandise Planning

Question 1

Define Merchandise Planning.

Answer 1

Merchandise planning is a method of selecting, managing, purchasing, displaying and pricing the products in a manner that they bring in maximum returns on investment, value addition to the brand name by satisfying the consumer needs while avoiding the creation of excess inventory.

Question 2

What are the elements of Merchandise Planning?

Answer 2

7 elements of the merchandise planning process:

1.Forecast category sales.
2. Develop an assortment plan.
3. Determine appropriate inventory level and product availability.
4. Develop a plan for managing inventory.
5. Allocate merchandise to stores.
6. Buy merchandise.
7. Monitor and evaluate performance and make adjustments.

Question 3

What are the components of Merchandising?

Answer 3

Buying,
Planning,
Managing, and
Controlling.

Question 4

What is the importance of Merchandise Planning?

Answer 4

1. Anticipate changes in market demand
2. Adjust product availability
3. Ensuring the right merchandise is available in the right quantities at the right time

Question 5

Mention the factors affecting or the challenges in Merchandise Planning.

Answer 5

Market trends,
Customer behaviour,
Inventory management,
Pricing,
Promotions and
Product assortment planning process.
Other important factors include
Supply chain logistics, competition, seasonality and sales forecasting.

Question 6

Describe the MPP (M Planning Process).

Answer 6

In general, during the execution process, the merchandiser perform the following operations (not mandatorily but) based on the organisation structure and policies.

i) Preparation of time and action plan for each order
ii) Development of order scheduling plan
iii) Analysis of factory capacity and line efficiency
iv) Estimate the approximate consumptions for various raw materials used in the production of that particular order for order quantity
v) Estimation of details regarding approximate output in each department
vi) Estimation of number of operator required for each department
vii) Proper follow-up and coordination with each department to complete the order in predetermined date to successfully complete the shipment process.

Question 7

Write a note about the Time and Action Plan.

Answer 7

The time and action plan (TNA or T&A Plan) is an important tool for a merchandiser to enlist his day-to-day activities or to enlist the different operations involved in the process of completing an order.
This process involves various department and different people in the manufacturing. Hence, this T&A calendar / plan helps the merchandiser to analyse every individual operation with the aspect of:
when to start?
when to end?
Is the process according to the plan?
Is there any deviation with the activity?

Time and action calendar defines the ideal date/time period within which the major activities of an order should occur against a scheduled delivery.
The merchandisers will develop list of activities need to be performed for an order in a spreadsheet with the expected date of completion and the actual completion date for each activity.

The main purpose of time and action plan is to cross check the each activity related to a particular order in frequent interval. The main advantage of the time and action plan is its graphical representation (Gantt chart). Hence, anyone can understand the information out of it without any technical background.
After the preparation of TNA calendar, merchandiser can list down their daily “to-do-list” and taking it one by one. As per TNA schedule processes can be executed on timely basis to track whether an order is on track or it will get delayed.

The time and action plan can be developed using different methods based on the requirements.
The commonly used methods:
Gantt charts
Network charts

• Gantt charts:
  A project planning tool that can be used to represent the timing of tasks required to complete a project.
  Allow to visualise a project’s start and end date along with each element or task that needs to be completed. Because many project tasks are dependent on previous tasks.
  These charts also allow to see these dependencies and schedule around them.
  Gantt charts are simple to understand and easy to construct, they are used by most project managers for all, but the most complex projects.
• Network charts:
  Are generally used for the project scheduling purpose, this scientific methods also can be adapted for the apparel order planning process.
  In general there are two methods used in the network charts,
  i) Critical Path Method (CPM) – Can be used for the projects in which activity times can be estimated with sufficient certainty – Building house, Erecting a machine, etc.
  ii) PERT (Program Evaluation and Review Technique) – Can be used for projects in which there is high degree of uncertainty about the activity times – Launching a space vehicle, developing a new product.