Guidelines for Case Based Assignments

Detailed solution required covering various possible aspects afecting

merchandising decision.
Case solution will be evaluated out of Maximum (1010! Mar"s.
#olution in groups on one case allotted b$ Course %nstructor and one
case on choice of group. %f allotted case is an odd one the group has to
choose other from the even one and vice versa. &he chosen case stud$
number has to be updated with instructor on or before 6th Sept,
2013
&he Case number has to be clearl$ mentioned on the solutions
submitted.
'n$ student ma$ decide to attempt a bonus case as well. &he bonus
case has to be attempted individuall$ and not in group. ' student is
free to choose an$ case as bonus case. &he bonus case will be
evaluated out of Maximum 10 Mar"s( which will be added to mar"s
scored b$ that individual in continuous evaluation.
&he presentation of cases will be scheduled from 20th Sept, 2013
onwards. &he detailed scheduled will be intimated in due course of
time.
'n$ strange similarit$)resemblance in an$ case solution will invite
penalt$( and *ero mar"s will be assigned to the individual)group.
&he case will be evaluated on the basis of completeness of solution(
coverage of issues afecting merchandising decisions( structure and
clarit$ of case presentation.
+ast Date of submission of allocated and bonus case is 14
st
Sept,
2013, 5:00 PM.
,o request for extension of last date under an$ circumstances will be
entertained.
-nl$ Hand Written solutions on './ sheets will be accepted.
'll doubts will be clari0ed in class on 6
th
Sept, 2013
1or group solutions all the team members will submit the report of
other team members (individuall$!( if an$ member fails to submit the
report of his team members( he will be given 203 of the Minimum
mar"s obtained b$ his team member. &he &eam members are to rated
on following parameters4
,ame of #tudent4
5roup ,umber4
1 -verall 6articipation in arriving at
solution.
1 7 8 / 2
7 %nterest level shown. 1 7 8 / 2
8 Mutual respect for team members. 1 7 8 / 2
/ %nputs provided to arrive at a solution. 1 7 8 / 2
2 -verall rating as a team member. 1 7 8 / 2
1 stands for low while 5 stands for very high
Feedback of all team members to be submitted in soft/hard copy to the course instructor by 14th
Sept, 2013, all soft copies may be mailed at himanshu.misra@jaipuria.ac.in.
If a member scores more than or equal to 1 marks !a"era#e of ratin#s of all items of
table, pro"ided by all his team members$% &o deductions
If scores bet'een 1()1*, 2(+ of marks obtained by him 'ill be deducted,
If scores bet'een 10)14, (0+ of marks 'ill be deducted and,
In case he scores less than 10, *(+ marks 'ill be deducted,
Group No:1 1 -aibha" .asto#i Allotted Case Study Chosen Case Study
2 /bhishek /#ar'al
Case Study: 1 Case Study: 3 Sh'eta 0hatur"edi
4 1ashas'i Sin#h
Group No:2 1 /mit 2ubey
Case Study: 2 Case Study:
2 /kanksha Sri"asta"a
3 3ohd, /leem
4 /nkit 4hutia
( /mit 5umar Sin#h
Group No:3 1 .ohit 3ishra
Case Study: 3 Case Study:
2 Shi"ank 3ishra
3 3ahesh Sin#h
4 3ohd, 4ilal
( 3ohd, .ahil
Group No:4 1 /stha 6e'ary
Case Study: 4 Case Study:
2 /nam /f7al
3 8arima Sri"asta"a
4 6anushree 8upta
( .oohi &akra
9 2eepshikha :andey
Group No:5 1 .a#ini 3ishra
Case Study: 5 Case Study:
2 Sayani 2as#upta
3 Supriya Sa;ena
4 /kancha Sin#h
( /nshita Sri"ata"a
Group No:6 1 6ushar 3ishra
Case Study: 5 Case Study:
2 <itendra 5r 6i'ari
3 <ai Sin#h
4 3ehar /7am
( .hytham =adkani
Group No: 1 /rpit Sin#h
Case Study: 4 Case Study:
2 Shruti Sa;ena
3 Shi"endra 3ishra
4 3ohd, Fahad
( :rateek 3ahaur
Group No:! 1 8hanak 0hatur"edi
Case Study: 3 Case Study:
2 <atin <ohar
3 <atin .akesh
4 Sa>al 0hatur"edi
( S'ati 3aha>an
Group No:" 1 .uchi :ipil
Case Study: 2 Case Study:
2 :oo>a Sin#h
3 =eena 4hatia
4 Shruti Sri"asta"a
( &itish 5r 8upta
Group No:1# 1
Case Study: 1 Case Study:
2
3
4
(
Case Study: 1
Balan$ing spa$e and mer$handising %ffe$ti&eness ,
/ leadin# lifestyle fashionable apparel retailer is contemplatin# 'ith the idea of chan#in# his
store layout so as to ensure optimal usa#e of space and better return on merchandise, ?e carries
3en@s, Aomen@s and 5id@s apparel, 6he last year sales and 8ross 3ar#in contribution is as
under%
0ate#ory Sales !In =akhs$ 8ross 3ar#in !In =akhs$
3en@s
Formal 3( 1
0asual 2 19
/ccessories 10 9
Aomen@s
Aestern 29 1(
Bthnic 49 29
Fashion /ccessories 1 11
5ids
5ids apparel 12 9
5id@s foot'ear, 9 3
Aithin 3en@s formal he carries prominent brands for shirts out of 'hich 3 are store label
brands, 'hile in trousers he has 4 brands, 2 bein# store label, 6he Store =abel 4rand offer 10+
hi#her #ross mar#in as compared to &ational =abel brands, Cne of the "endors 'ho supplies
DE=6I3/F brand !Shirts and 6rousers$ has offered the retailer an additional discount of 10+ if
he #ets prominent display areas inside the stores,
Aithin 'omen@s 'ear ethnic is the bi##est contributor, out of ten brands, are store label brands
'hich #i"es an opportunity to the retailer incorporate latest fashion and trends in his Sal'ar
Suits, =ast fe' months ha"e seen the #ro'th in popularity of Gmi; and match@ in Sal'ar Suit
cate#ory, 6he retailer 'ants to hi#hli#ht this item in the ethnic cate#ory, 6he pri"ate label brand
DS/&S5.I6IF is the fla#ship brand in 'omen@s cate#ory and stands for inno"ati"e desi#ns
ahead of times and "ery popular amon#st teena#ers,
6he total area of the retail outlet is (000 square feet !on the same floor$ and carries only these
three product cate#ories, 6he store is located on the #round floor and has "isibility from t'o
sides inside the mall, It has three entry points out of 'hich t'o are entry as 'ell as e;it point
'hile one entry point connects the store from parkin# lot, 6he other outlets located ne;t to the
retailer are 3c2onalds, 4arista, :i77a ?ut, 6anishq, :antaloons, 4iba, =e"i@s and fe' others,
C"erall the mall has t'enty fi"e apparel retailers, ei#ht of them on the same floor, :rice 'ise ten
retailers are in the same cate#ory but only three of them ha"e all the three cate#ories, others are
specialty retailers dealin# either in men, 'omen or kids cate#ory,
6he kid@s apparels are for a#e #roup 3)14, men and 'omen apparels for customers in a#e #roup
20)4(, 6he customers belon# to hi#her income #roup 'ith monthly income in ran#e of 1)1,(
=akh, they mostly come 'ith four 'heelers and "isit frequency is almost once in 2)3 months
'ith a"era#e bill si7e in 20)2(,000 .s ran#e, &ormally the entire family comes for purchases and
makes purchases for e"ery family member, In ma>ority of the cases alteration is required and the
store takes 30)4( minutes for the same, *0+ of the customers are enrolled in the loyalty
pro#ramme run by the store, 90)*0+ of payments are made 'ith the help of cards, 6he
customers are reasonably satisfied 'ith the store and e;pect latest trends and desi#n, 'ant to
look different and percei"e shoppin# to be a hedonic acti"ity and fun time spent 'ith family and
lo"ed ones, Cn 'eekdays footfall is (00)00 'hich s'ells to 1(00)2000 on 'eekends, 6he
con"ersion ratio is 90)9(+,
Ahich layout is more suitable for retailer, ho' the interiors should be desi#ned, 'here the
"arious cate#ories should be placedH :repare a detailed plan !support it 'ith a pictorial depiction
of the plan as 'ell$ co"erin# all the aspects related to the layout and display of the products, /lso
discuss the "isual merchandise plan for the store as 'ell, co"erin# the interiors and e;ternal
display as 'ell, /llocate non)sellin# and sellin# spaceI further allocate sellin# area to the
different product cate#ories focusin# on "arious aspects to be kept in mind, 2esi#n the layout
and display keepin# in mind the "arious factors 'hich may play a decisi"e role, 2iscuss the
"arious fi;tures their position and material used as 'ell,
1ou can also su##est the retailers to carry some e;tra cate#ories if desired but the su##estion
should be backed up by sound lo#ic, you can also su##est any other ser"ices 'hich may be
offered by the retailer or any other aspect 'hich you feel may play a "ital role, 6he sale of the
outlet increases almost 4)( times durin# festi"als like ?oli and 2eepa'ali, apart from that the
customers often makes purchases to celebrate 4irthdays, anni"ersary and other occasions like
Friendship day, -alentine 2ay etc,
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Case Study: 2
India is under#oin# unprecedented chan#e, It is one of the fastest)#ro'in# lar#e economies in the
'orld, 'ith a population of around one billion people, 'ith hu#e human and natural resources,
and 'ith costs that are at the "ery lo' end of the #lobal a"era#e,
3ost of India@s #ro'th is in the future, not the past, 6he main reason for this is India@s
demo#raphic ad"anta#e% India@s 'orkin# a#e population 'ill continue to #ro' for the ne;t t'o
decades at least, unlike most emer#in# economies 'hich 'ill see their 'orkin#)a#e populations
decline as a proportion of the total,
1oun# 'orkin# populations dri"e personal consumption, and brin# efficiency and inno"ation to
retail markets, DIndian consumers ha"e e"ol"ed,F says a leadin# 'atch and >e'elry maker, D6hey
e;pect quality to #o up, /nd they e;pect prices to #o do'n, 6hey are interested in "alue,F
'ndia: A $ountry going digital
In recent past India has taken hu#e strides in consumer di#itali7ation, computers internet ha"e
chan#ed the 'ay customers used to plan and purchase, 6he a"ailability of information on mouse)
click, product comparison, personal assistance, cash on deli"ery are rapidly chan#in# the 'ay the
customer shops, / snap shot of India@s di#itali7ation is as follo's%
0 million Internet users,
10 million 38 connections 'ithin 9 months of launch, almost equal to the base of
'ireline broadband connections,
2nd lar#est user base for 8oo#leJ and Crkut in the 'orld,
2+ of tra"el #ets booked onlineI 11* million transactions on I.060 alone,
4*+ of the classifieds business is online,
*+ of bank users in India access their accounts online,
2(+ of I6 returns 'ere filed online in 2010)11,
0lose to (0+ of music re"enues in India comes from mobile do'nloads,
6here are an estimated 0 million Internet users in India today, 'hich represents a penetration of
*+ of the population !1*+ of urban population$, 6his is si#nificantly lo'er than #lobal
benchmarks !a"era#e 31+ of total population$,
/ll these de"elopments ha"e brou#ht e)commerce into mainstream ne's, B)commerce
companies are reportin# double di#it #ro'ths on a month)on)month basis, Some are recordin#
re"enues in the re#ion of a 0rore a day ) ri"alin# retail brands that ha"e been around for more
than 10 years, / leadin# e)tailer e;pects to increase its re"enues (K this year, In South 4an#alore
) ar#uably India@s most tech)sa""y acrea#e L companies are deployin# do7ens of courier boys to
pro"ide personali7ed deli"ery ser"ices, 0ricket matches are interspersed 'ith ads of Internet
companies, Site traffic statistics ha"e #one up by 1(0)200+ bet'een 3ay and September this
year itself, /nd the pace is only increasin#,
4esides :0 broadband, there is a massi"e mobile broadband phenomenon under'ay, 38 ser"ices
ha"e acquired M million connections 'ithin 3 months of launch, Further this number is bound to
impro"e si#nificantly in the comin# years,
Smart)phones are becomin# more and more pre"alent, 'ith the lo'est priced smart)phone bein#
a"ailable at .s 3,000 already, 6his number is e;pected to further #o do'n to reach .s 2,000 ,
potentially openin# the flood#ates for smart)phone adoption, / 3c5insey estimate puts the
number of smart)phones in India at 4(0 million in 201( ,
/nd if this 'as not enou#h% 6he road ahead by 201(%
0 million online users today, 3*9 million by 201(,
2e"ice costs ) :0s or smart)phones are not #oin# to be limiters to #ro'th, /ccess and
pricin# 'ill play the ma>or role,
:0 broadband ) the key dri"er for e)commerce #ro'th ) to ha"e 1(,9+ household
penetration,
0on"entional 'ire)line broadband likely to be eclipsed by the introduction of 48 and
the #ro'th of 023/ don#les,
38 'ill chan#e the face of Internet access ) creatin# access for 22+ of the population,
Shared, or public access 'ill reduce in proportion as more people #et personal
Internet access,
6he time spent online 'ill #ro' by 2*+ per user ) dri"in# ad"ertisin# and commerce
&umber of transactin# users to #ro' from M million at present to 3 million,
/lthou#h some questions 'hich are still unans'ered%
6he quality of Internet connecti"ity #ood enou#h to dri"e consumption onlineH
Is the payment infrastructure ready to support lar#e scale e)commerce #ro'thH
/re Indian consumers really ready to embrace e)tailin#H ?o' many are actually
transactin#H
?o' ready is the supply chain infrastructure to handle direct consumer deli"eriesH
2o 'e ha"e the ri#ht talent and en"ironment a"ailable 'ithin the industryH
Ahat is the path to profitabilityH
4ut despite the challen#es hurdles and insecure en"ironment, the di#ital stride can only be
e;plained as impressi"e impressi"e and impressi"e,
Impressed by the promisin# >ourney of or#anised retail in India and the recent di#ital strides 3s,
-andana Sood, a youn# 'omen entrepreneur is contemplatin# 'ith the idea of comin# up 'ith a
retail establishment offerin# 8ifts for all occasions, She plans to start the "enture from year
2014, Some features of her business plan includes%
(arget Segment% She is plannin# to tar#et hi#her income households and 'ill offer #ift options
for almost all occasions, all festi"als, all prominent days and #ift options for infants to #ro'n up,
?er plan is to pro"ide a one stop #ift solution and ser"ices under one roof, She has also planned
for deli"ery of selected #ifts to all parts of the country,
)etail plans% She plans to start from =uckno' city as she has been born and brou#ht up in the
city of &a'abs, 6he initial fi;ed in"estment for openin# a rented outlet of 1000 sq ft ran#es from
1()2( =akh, 6he other associated costs are mentioned in the 4alance sheet, She plans to open
another outlet in &0. re#ion after 2 years, and her lon# term plan includes openin# 2 outlets
e"ery year after ( years tar#etin# e"ery bi# city in Ettar :radesh and ad>oinin# states,
(he dilemma of Bri$* and +ortar &s, Cli$* and +ortar% / ne' a#e entrepreneur 3s
-andana is a techno #eek and is impressed 'ith India di#ital #ro'th prospects, 8ift is one
cate#ory 'hich is doin# #ood in di#ital space as 'ell, She is undecided about his operations,
Some points in fa"or of di#ital operations apart from discussed earlier include%
-esser initial in&estment: 'ebsite de"elopment costin# 1,( lakh, initial promotion 3=akh,
o'narehouse to cost 4 lakh and can co"er distances in radii up to 00 km, 3)4 'arehouses may
co"er prominent cities in Ettar :radesh, 6he scope of operations can also be ad>usted as per the
business requirements, Crdered online #ifts may be deli"ered in any State only the time taken in
deli"ery 'ill chan#e, 6he operations 'ill be easy to man#e as 'ell and "ery order can be tracked
as 'ell,
/lthou#h she has estimated follo'in# information but she is yet to estimate the 4reak e"en point
for store and non)store based model%
:ro>ected Income Statement !14)1($
Store 4ased Cperations Cnline Store
&et Sales ,00,000 (,(0,000
0ost of 8oods sold 4,*0,000 2,(0,000
Cperatin# B;penses 2,00,000 *(,000
6a; N30+
:ro>ected 4alance Sheet Items !14)1($
Store 4ased Cperations Cnline Store
/ccounts .ecei"able 30,000 *(,000
3erchandise In"entory 12,00,000 4,00,000
0ash 4(,000 (,000
Fi;ed /ssets 12,00,000 4,00,000
?elp -andana is decidin# on the mode of his retail operationsH Ahether she should #o for an
online portal or a retail store or both in different time frame or to#etherH Support your choice
'ith the analysis of data pro"ided in the case,
/naly7e in detail the ad"anta#es and disad"anta#es of both the options in short and lon# run
based on the information #i"en in caseH
In #eneral 'hat may be the ad"anta#es and disad"anta#es of offline and online retail operations
in such cate#oriesH
Case Study: 3
DIn) FashionF, a leadin# fashion accessories retailer is on #ro'th trend and the success is lar#ely
credited to effecti"e merchandise mana#ement, 6he retailer is quick to identify the trends and is
a preferred destination for not only youth but fashion conscious elderly as 'ell, 6he retail outlet
is so attracti"e that it forces e"ery passerby to stop for 'indo' shoppin# and allures them to
check in the retail outlet, Cnce in the products are displayed so attracti"ely that one cannot resist
but >ust indul#e in shoppin# spree, 6he footfall is 100)12( on 'eekdays and reaches up to 2(0
durin# 'eekends, In) fashions is a 'ell kno'n name in this se#ment and stand for e;clusi"ity
and lu;ury, Stores are min 10,000 sq ft 'ith adequate free space for customers to mo"e
comfortably, 6he retailer is plannin# to add t'o more cate#ories to his retail offerin#, 6he 0hief
e;ecuti"e is analy7in# the follo'in# ( cate#ories to add to his merchandise mi; based on
follo'in# fi#ures%)
0ate#ory Bstimated 1early
&et Sales
8ross
3ar#in +
Cperatin#
B;penses
/"era#e In"entory
!0ost$
8old plated and diamond
studded <e'elry,
34,00,000 90+ 2,(0,000 ,00,000
Imported perfumes and
2eo,
1(,00,000 40+ 0,000 1,00,000
=eather 4a#s, belts, shoes
and other accessories,
1,00,000 30+ 90,000 3,30,000
:remium cosmetic
products like nail paints,
mascara, hi#h end facial
and massa#e creams etc,
22,00,000 40+ 40,000 1,(0,000
=eadin# Inner'ear 14,00,000 3(+ 30,000 1,20,000
brands for males and
females
6able &o%1
?e is plannin# to add any t'o cate#ories, ?elp the retailer in selectin# the t'o cate#ories 'hich
he should keep so that he can #enerate ma;imum profits 'ith minimum in"estment, /ll the
abo"e cate#ories he can sell throu#h out the year and all the abo"e cate#ories #els 'ell 'ith his
e;istin# offerin#, 6he retailer has additional 4000/) sq ft sellin# space a"ailable to him 'hich he
may allocate to the cate#ories selected, help the retailer in allocatin# space to the t'o selected
cate#ories as 'ell, Cf the e;istin# cate#ories 'hich the retailer carries he is plannin# to remo"e 2
cate#ories, he is decidin# amon#st follo'in# cate#ories%
6able &o%2
?elp the retailer in decidin# 'hich t'o cate#ories he may drop, /lso analy7e the total impact on
the sales, #ross mar#in and &et :rofit of retailer as a result of droppin# t'o e;istin# and addin#
t'o ne' cate#ories to his outlet, /naly7e the performance of retailer usin# :rofit :ath 3odel
'hen he carries only four cate#ories mentioned in 6able &o%2, and also 'hen he drops t'o
e;istin# and adds t'o ne' cate#ories from 6able &o%1, 6he e;penses 'hich he incurs further are
as under%
Salary B;penses% 19 lakh per annum
8eneral B;penses% 12 =akh per annum
/dministrati"e B;penses% 2 =akh per annum,
Case Study:4
.uture (rends /epartment store: /e&eloping a +er$handise 0lan,
Future 6rends department store@s success is a perfect e;ample of perse"erance, commitment and "ision
of first #eneration entrepreneur 3r, Shubham 3ehrotra, startin# 'ith a modest in"estment of 1 =akh
rupees in the year 1MM9 this one shop outlet is no' a 9* stores 2epartmental stores spread in 2 cities,
It has 4 outlets in =uckno' at 8omti &a#ar, /li#an>, /lam 4a#h and ?a7rat#an>, 6he a"era#e retail
space in these outlets is 40,000/ Sq ft and they carry follo'in# merchandise cate#ories%
a$ 3en@s /pparels,
b$ Aomen@s and kids apparels,
c$ Food and #rocery items,
d$ ?ome furnishin# items,
e$ Fashion /ccessories,
6he departmental store in =uckno' has a consistent record and since last ( years there combined
turno"er has increased from (0 =akh to ( 0rores, 6he percenta#e contribution of /pparels !3en@s,
Aomen@s and 5ids inclusi"e$ is 4(+ of total sales and its #ro'th has been ma;imum in last ( years
'hile men apparel contributes 3(+, 'ithin the apparels contribution of 'omen apparels is ma;imum,
6he .etailer /ssociation of India has predicted a #ro'th of 22+ in 'omen apparel cate#ory, 3r,
3ehrotra is "ery enthusiastic about the forecasts and he 'ants to pay special attention to this cate#ory
and has plans of his o'n, 6he sale of 'omen cate#ory in last three years is as follo's%
1ear 6otal sales February 3arch /pril 3ay <une <uly
0ate#ory Bstimated 1early
&et Sales
8ross 3ar#in + Cperatin#
B;penses
/"era#e In"entory
!0ost$
?ome 2Ocor and
Furnishin# items
(3,00,000 20+ 2,2(,000 2(,(0,000
:arty 'ear dresses 2,00,000 30+ 1,0,000 1(,00,000
4ridal 'ear both for
bride and #rooms
39,00,000 4(+ 1,20,000 10,00,000
:remium brand 'atches
for men, 'omen and
kids
12,00,000 40+ 40,000 4,20,000
2011 2000000 300000 400000 20000 290000 290000 (00000
+ sales 3onth 'ise 100,00+ 1(,00+ 20,00+ 14,00+ 13,00+ 13,00+ 2(,00+
.eductions (0000 2000 1000 2(00 2(00 1(00 23(00
+ reductions month 'ise 100,00+ 4,00+ 39,00+ (,00+ (,00+ 3,00+ 4*,00+
2012 2(00000 32(000 (00000 32(000 400000 300000 9(0000
+ sales 3onth 'ise 100,00+ 13,00+ 20,00+ 13,00+ 19,00+ 12,00+ 29,00+
.eductions 90000 100 21900 3000 3000 100 200
+ reductions month 'ise 100,00+ 3,00+ 39,00+ (,00+ (,00+ 3,00+ 4,00+
2013 3200000 34000 940000 419000 (*9000 3(2000 32000
+ sales 3onth 'ise 100,00+ 12,00+ 20,00+ 13,00+ 1,00+ 11,00+ 29,00+
.eductions *(000 22(0 1*(0 4(00 22(0 3*(0 43(00
+ reductions month 'ise 100,00+ 3,00+ 2(,00+ 9,00+ 3,00+ (,00+ (,00+
6he sale of men cate#ory in last three years is as follo's%
1ear 6otal sales February 3arch /pril 3ay <une <uly
2011 1(00000 3*(000 1(0000 10000 22(000 1M(000 3*(000
+ sales 3onth 'ise 100,00+ 2(,00+ 10,00+ 12,00+ 1(,00+ 13,00+ 2(,00+
.eductions 2(000 4(00 12(0 12(0 2(00 3*(0 11*(0
+ reductions month 'ise 100,00+ 1,00+ (,00+ (,00+ 10,00+ 1(,00+ 4*,00+
2012 100000 3M9000 2000 219000 10000 10000 (40000
+ sales 3onth 'ise 100,00+ 22,00+ 19,00+ 12,00+ 10,00+ 10,00+ 30,00+
.eductions 30000 400 100 1(00 3900 4200 14100
+ reductions month 'ise 100,00+ 19,00+ 9,00+ (,00+ 12,00+ 14,00+ 4*,00+
2013 2000000 (90000 300000 240000 240000 190000 (00000
+ sales 3onth 'ise 100,00+ 2,00+ 1(,00+ 12,00+ 12,00+ ,00+ 2(,00+
.eductions 32000 9400 2(90 1M20 400 (*90 10(90
+ reductions month 'ise 100,00+ 20,00+ ,00+ 9,00+ 1(,00+ 1,00+ 33,00+
/s clear from the table the merchandise plan is prepared for si; month period !be#innin# February and
endin# <uly$ and mainly consists of fashionable summer apparels, 3arch and <uly contributes bi##er
percenta#e of sales as 'ell as bi##er allocation of reductions, 6he reasons are quite ob"ious in 3arch
the store offers "arious discounts on behalf of ?C=I and in <uly a#ain discounts are offered as a part
of Bnd of Seasons Sales, 6he 8ross mar#in return on in"entory in"estment !83.CI$ for 'omen
apparels is 200+ and for men it is 2(0+ makin# this cate#ory "ery attracti"e and 'ith hi#her #ro'th
it attracts many retailers, 6he competiti"e scenario 'ill also chan#e ne;t year as 4iba and <ashn 'ill
also start their operations from <anuary 2013 and another 1()20 unor#ani7ed apparel retailers 'ill also
open their shop, 2ue to increased competition the company has decided to increase the reductions by
another 2(+ in 2014 as compared to 2013, 6he Bnd of 3onth !BC3$ in"entory for the month of <uly
is 4(,(00/ and 9(,000 for men and 'omen apparel respecti"ely, 6he 'omen@s apparel #i"es a #ross
mar#in of (0+ 'hile men apparel #i"es a #ross mar#in of 40+,
:repare a 3erchandise 4ud#et plan for February 2014) <uly 2014 estimatin# 4e#innin# of 3onth
in"entory !4C3$, Bnd of 3onth !BC3$ in"entory and 3onthly /dditions to StockH
/s the season started 3r Shubham reali7ed the follo'in# for 'omen apparels
3onth /ctual
Feb Sales 20+ =ess
.eduction 10+ 3ore
3arch Sales 10+ 3ore
.eduction (+ 3ore
/pril Sales 1(+ =ess
.eduction 10+ =ess
6akin# into consideration these actual chan#es in the planned sales and reduction, calculate Cpen to
4uy for "arious months !3arch, /pril and 3ay$ takin# into consideration the abo"e chan#es,
Case Study :5
Shaadi1 Baarati
Shaadi)4aarati is a retail outlet speciali7in# in marria#e dresses for brides and #room, 6he store
carries 'eddin# dresses for people belon#in# to e"ery reli#ion, 0onsiderin# the super)specialty
nature of merchandise the store tar#ets customers from e"ery se#ment, 6he first price point starts
from (000/) from #rooms, and at around *000/) for brides, 6he store also pro"ides ad"isory
ser"ices and customi7ed dresses made to order, So in all the store caters to 'ide "ariety of
customers, 6he store also has an in house o'n boutique as 'ell, rest of the ready made
merchandise they procure from main "endors, 6he performance of the store for last fi"e years
is as follo's%
1ear &et Sales
!In =akh$
200*)0 ((
200)0M 9*
200M)10 *
2010)11 (
2011)12 M

6he contribution in sales per "endor is as follo's%
Fi#ures in =akh
&ame of -endor 200*)0 200)0M 200M)10 2010)11 2011)12
1 /rmaan /li and Sons 4 3 ( * 10
2 .am =al /#ar'al and Sons 9 10 11 13
3 3ary <ones and 0ompany 2 3 4 4 (
4 8uru &anak 6raders 3 4 ( ( 9
( 6opline 3arketin# 0o * M 12 19
9 4hola &ath and Sons * M 10 11 12
* Aahid and <ubair 9 9 * M
In)-o#ue M M * * *
6he remainin# sales come from the boutique and on an a"era#e the merchandise are Dmade to
orderF, 6he store #ets a #ross mar#in of 90+ on sales of made to order merchandise in the store,
/part from that the boutique also helps in alteration of readymade apparels, the store char#es no
alteration fee from customers, 6he boutique also offers e;press deli"ery ser"ices to the
customers as 'ell 'here a made to order dress may be deli"ered 'ithin *2 hours on payment of
10+ e;tra char#es,
6he #ross mar#in offered by these "endors are as follo's%
&ame of -endor 8ross 3ar#in
1 /rmaan /li and Sons 4(+
2 .am =al /#ar'al and Sons 3+
3 3ary <ones and 0ompany (+
4 8uru &anak 6raders 4(+
( 6opline 3arketin# 0o 40+
9 4hola &ath and Sons 39+
* Aahid and <ubair 4(+
In)-o#ue 3(+
6he other key "ariable e;penses of the store !for year 2012$ include%
.ent% 90,000 per month, !Increase of 10+ after e"ery ( years$
Salary !Sale and non sellin# staff$% 1,( =akh per month, !B"ery year it 'ill increase by 10+$
Blectricity and utilities% /"era#e 20,000 per month,
3iscellaneous B;penses% 1(,000 per month, !(+ increase per year$
6he fi;ed in"estment includes%
2isplay and Fi;ture% 2( =akh
Initial Cpenin# B;penses% ( lakh
Floorin# and 0eilin#% 1( =akh,
Cthers !Bquipments and shoppin# carts$% 10 =akh
3achines for 4outique% 1 =akh,
6a; N 20+
/naly7e the yearly performance of retailer usin# :rofit :ath and /sset turno"er model, /lso
estimate the break e"en point for the retailer, C"er these ( years, Shaadi)4aarati has become a
kno'n brand in =uckno', 6he store has sho'n continuous increase in sales and en>oys customer
loyalty and referrals as 'ell, From ne;t financial year the retailer is plannin# to add fe' more
cate#ories, ?e is decidin# amon#st follo'in#%
?elp the retailer in decidin# ho' many cate#ories out of the abo"e three he can keep,
0ate#ory Bstimated
1early &et
Sales
8ross 3ar#in + Cperatin#
B;penses
/"era#e
In"entory
!0ost$
4ridal 3ake up 14,00,000 (0+ 1,20,000 3,0,000
Florist Ser"ice 3,00,000 30+ 30,000 30,000
Aeddin# 0ard
2esi#nin# and :rintin#
9,00,000 40+ 0,000 90,000