Trinity Model

Question 1

trinity model allows for:

Answer 1

● internal comparison for stores and departments over time
● external comparison of the competition to get an impression of the strength and weaknesses

Question 2

Structure and application of the trinity model

The model is based on the idea that in retail only these 3 assets need to be managed:

Answer 2

Products (variable assets) → stock efficiency (return on inventory)

Square metres (fixed assets) → floor efficiency (return on floor)

People (human assets) → labour efficiency (return on labour) → expressed in full-time equivalent (FTE)

Question 3

TOP LEVEL

gross margin x

Answer 3

sales / stock = sales rate —> stock efficiency

x retail sales floor / stock = stock density

Question 4

MIDDLE LEVEL

gross margin x

Answer 4

x sales / retail sales floor = floor productivity –> floor efficiency

x retail sales floor / FTE

Question 5

LOW LEVEL

gross margin x

Answer 5

x sales / FTE = labour productivity –> labour efficiency

Question 6

three rules trinity model

Answer 6

optimize GMROI

increase stock as long as GMROF increases

optimize GMROL