Optimizing Shelf Space: Linear Optimization & Stock Management
Linear Optimization
The merchandiser approaches the task of determining, for each product family, the optimal number of facings of each item that must be exposed on the shelves available to the family.
- Variables Involved in the Calculation of Optimal Facings
- Organizational variables:
- Conditioning Unit: each item must have a sufficiently linear so you can expose it to a full box of this article.
- Sales heaviest day of the week: Each item must have a linear enough to expose a stock equivalent to the sale of the day stronger, to avoid the possibility of broken stocks.
- Need linear relationship between two refills: In those families which are not replenished daily linear, linear should be assigned not replenished daily angina should be a linear exposure for each item that allows sales deal between two replenishments.
- Commercial Variables
- Item perception threshold: Each item must have a minimum exposure linear allowing it to be seen by customers on their journey. Therefore, each item needs a minimum of 33 cm to be seen by customers
- Monetary unit sales: The more you sell an item, more linear and thus is assigned you from having to make continuous replenishment and possible rupture of stock.
- Customer purchase Unit: Represents the amount of each item that you purchase a customer in the act of purchase.
- Gross margin: The more margin generate an article, more linear is given to increase profits per family section. Exceeded the threshold of perception of an item, the more linear is assigned, the higher sales, but to a limit.
ITEM 7
Need of Stocks at the Point of Sale
The merchandiser must pay close attention to the linear supply available at the point of selling the right products at the right time and in the amounts needed to meet the demand of its customers at the time of purchase.
Concept of Stock
Stocks, stock or inventory are all products that a facility has stored at any given time waiting for a subsequent action.
Differences between stock and range:
The range is the set of products that an establishment offers its clients to sell while the stock represents the accumulated amount in stock of each of these products.
Structure and Size of Stock
To maintain a balanced stock should achieve the following objectives:
- Cover sales period between two supplies
- Dealing with sales during the delivery from suppliers.
- Present in linear enough of each product
- Be prepared for the possible fluctuations in the rate of sales and / or delivery by suppliers.
It follows that the total stock should consist of:
- The stock opened: that is the stock of items exposed on the shelf, to meet sales.
- The stock of reserves, normal cycle, is one that allows to cope with normal demand of customers between the receipt of two orders.
- The safety stock is a stock of protection which seeks to prevent the shelf is empty
Variables Affecting the Management of Stocks
- The Level of Customer Service
The level of service is the ability to offer customers the products they demand at the time of purchase.
The Sales Forecast
The sales forecast allows us to know approximately how much we sell of each product, which helps us to provision the same in quantity and at the right time.
- Product performance: Using the ABC method of analysis we can see the different behaviors of the products:
- Category A is formed by a small number of products are best sellers.
- Category B: It is formed by a larger number of products that generate less turnover.
- Category C: It is formed by a large number of products sold very little.
- Behavior of the application:
- Demand remains more or less constant during the study period
- The demand is seasonal and has fluctuations that are repeated, with most sales at certain times within the study period
- Demand is increasing or decreasing trend during the period.
- Costs of the Management of Stocks
- Acquisition cost is the value of purchase invoice, plus any fees charged to the buyer until the goods reach the destination store.
- The cost of storage or maintenance which occurs as a consequence of keeping items in stock, among them are the following:
- The costs of investing in stocks
- Risk costs
- The local costs or warehouse
- Depreciation
- The cost to preserve and maintain