Question

After graduating from college, Melissa Malone landed a position with Orchard Creek, one of the finest children’s boutiques in the Boston area. Three years ago, Melissa was promoted to Assistant Buyer. Among her other responsibilities, Melissa is now the sole buyer for the Children’s Accessories Department.

Orchard Creek has successfully been selling children’s clothing over 25years. Its merchandising assortment includes classic children’s clothing, fashionable accessories, and unique gift items for infants, toddlers, boys, and girls.  Employee takes great pride in this store. The boutique, well known for its merchandise quality and exceptional customer service, has received many awards, including the “Readers’ Choice Award” and “Top Pick” for Best Children’s Clothing from local newspapers as well as regional magazine.

This fall, however, the Children’s Accessory Department is failing short of meeting its sales goal. During an October meeting with the department sales manager, the merchandise manager, and the advertising manager, Melissa was directed to examine her department’s performance. Within two days, Melissa must analyze the performance of the Children’s Accessories Department, compare it with the department’s six moth plan, calculate the department’s open-to-buy for the remainder of October, and identify feasible options for getting the department back on track.

Melissa reviewed her six-month plan for Orchard Creek’s Children’s Accessory Department, including the actual performance for August and September. She also observed the department’s current performance from October 1 through October 15. In her midmonth analysis, Melissa observed the following:

• Planned sales for October were $7,891
• Actual sales from October 1 through October 15 were $3,529
• The value merchandise on-order scheduled to arrive before the end of October is $2,749
• Planned markdown for October was 1,560
• Actual markdown taken from October 1 through October 15 was $715
• Stock on hand as of October 15 is valued at $22,160
• Planed EOM for October were $18,272
• Markup % is 61.5 %

When Melissa checked the department Six Month Plan, planned purchase in October was 10,439 at retail and $4, 019 at cost. However, as of October 15, the OTB in her department is very low. What immediate steps should Melissa take to improve her open-to-buy? May have to find OTB at Retail and OTB at Cost.

Answer 1