Lecture 6 - part 2: trinity model Flashcards
1
Q
The assets in retail:
A
1) Goods -> variable assets
2) Bricks -> fixed assets
3) People -> human assets
2
Q
Productivity or efficiency?
A
It is not about the lowest cost solution but highest efficiency solution.
3
Q
The model, per column:
A
First column: - Margin Second column (productivity): - Sales Rate - Goods intensity - Floor productivity - Self service ratio - Labour productivity Third column (efficiency: - Stock efficiency - Floor efficiency - Labour efficiency
4
Q
Margin
A
Gross profit margin / sales
5
Q
Sales rate
A
Sales / stock
6
Q
Goods intensity
A
stock / retail floor space
7
Q
Floor productivity
A
sales / retail floor space
8
Q
Self service ratio
A
retail floor space / FTE
9
Q
Labour productivity
A
sales / FTE
10
Q
Stock efficiency
A
GPM / stock
11
Q
Floor efficiency
A
GPM / retail floor space
12
Q
Labour efficiency
A
GPM / FTE
13
Q
Three rules of thumb:
A
1) Optimize GMROI
2) Increase stock as long as GMROF increases
3) Optimize GMROL
14
Q
GMROI
A
Gross margin return on inventor (stock efficiency)
15
Q
GMROF
A
Gross margin return on space “floor” (floor efficiency)
