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A merchandise plan is a systematic plan prepared by a retailer or merchandiser to determine what merchandise should be bought, in what quantity, at what price, when it should be available, and how it should be presented and sold to customers during a particular selling period. It is an important part of buying and merchandising because it connects the retailer’s sales objectives with purchasing and inventory decisions. The merchandise plan aims to ensure that the right product is available in the right quantity, at the right time, at the right price, and in the right store or sales channel. It helps retailers avoid both overstocking and stock shortages and enables them to achieve planned sales, profit and inventory turnover. A merchandise plan generally includes decisions relating to product categories, styles, colours, sizes, brands, price ranges, quantities, delivery schedules, stock levels, markdowns and promotional activities. It may be prepared for a season, financial year, quarter or month. For example, a fashion retailer preparing a merchandise plan for the summer season has to estimate the expected demand for shirts, dresses, trousers and other products, decide the quantity to purchase, determine the appropriate price ranges and schedule deliveries according to the expected selling period. Several factors are considered while preparing a merchandise plan. The first factor is the overall business objectives of the retailer. The merchandise plan must support the retailer’s objectives regarding sales, profit, market share, customer acquisition and growth. If the retailer aims to increase sales in a particular product category, more merchandise and promotional support may be allocated to that category. Similarly, if improving profitability is the objective, ___ __________ ________ __________ __________ __________ _____ ____ _______ _________ _________.
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