Unit of Competency Mapping – Information for Teachers/Assessors – Information for Learners

SIRRMRM005 Mapping and Delivery Guide
Develop a category financial plan

Version 1.0
Issue Date: March 2024


Qualification -
Unit of Competency SIRRMRM005 - Develop a category financial plan
Description
Employability Skills
Learning Outcomes and Application This unit describes the performance outcomes, skills and knowledge required to undertake merchandise financial planning at the category and sub-category level for a retail organisation. It requires the ability to review a merchandise financial plan and allocate financial values to individual product categories. This unit applies to individuals working in merchandise management-related roles in a diverse range of retail sectors and business contexts. They operate with independence and are responsible for making a range of operational business decisions related to the management of retail merchandise. No occupational licensing, certification or specific legislative requirements apply to this unit at the time of publication.
Duration and Setting X weeks, nominally xx hours, delivered in a classroom/online/blended learning setting.

Skills must be demonstrated in a retail environment. This can be:

an industry workplace

a simulated industry environment.

Assessment must ensure access to:

relevant documentation:

merchandise financial plan

in-trade performance data

templates for merchandise category planning

software for merchandise category planning.

Assessors must satisfy the Standards for Registered Training Organisations’ requirements for assessors, and:

have worked in the retail industry for at least three years where they have applied the skills and knowledge within this unit of competency.

Prerequisites/co-requisites
Competency Field Merchandise Management
Development and validation strategy and guide for assessors and learners Student Learning Resources Handouts
Activities
Slides
PPT
Assessment 1 Assessment 2 Assessment 3 Assessment 4
Elements of Competency Performance Criteria              
Element: Determine category planning requirements.
  • Access and review organisational merchandise financial plan to determine category financial planning requirements at the category and sub-category level.
  • Profile target market and identify relevant trends to optimise sales opportunities within category plan.
  • Determine open-to-buy or space capacity for the trading period.
  • Determine strategies and pricing structures to achieve gross margin and margin mix.
       
Element: Develop category financial plan.
  • Plan and calculate inventory values using open-to-buy or space capacity method for each category.
  • Allocate inventory value to core and seasonal lines.
  • Assess risk level of inventory within each category and plan markdown value and stock exit strategy to maximise profitability and maintain inventory at budgeted levels.
  • Review promotional plan to determine impacts of planned promotional activity on category planning.
  • Identify and hold back a percentage of category plan spend for reaction to trade.
  • Document category plan using established organisational systems and processes.
  • Obtain input from relevant personnel and make adjustments to category financial plan based on feedback received.
  • Finalise category financial plan and gain required approval.
  • Communicate category financial plan to relevant personnel to inform range planning and merchandise buying.
       
Element: React to trade.
  • Evaluate internal and external factors impacting category performance and make any required adjustments.
  • Use action levers to react to in-trade performance.
  • Re-plan category financial plan based on sales, inventory and profit values during trade.
  • Communicate changes to relevant personnel as required.
       


Evidence Required

List the assessment methods to be used and the context and resources required for assessment. Copy and paste the relevant sections from the evidence guide below and then re-write these in plain English.

ELEMENTS

PERFORMANCE CRITERIA

Elements describe the essential outcomes.

Performance criteria describe the performance needed to demonstrate achievement of the element.

1. Determine category planning requirements.

1.1. Access and review organisational merchandise financial plan to determine category financial planning requirements at the category and sub-category level.

1.2. Profile target market and identify relevant trends to optimise sales opportunities within category plan.

1.3. Determine open-to-buy or space capacity for the trading period.

1.4. Determine strategies and pricing structures to achieve gross margin and margin mix.

2. Develop category financial plan.

2.1. Plan and calculate inventory values using open-to-buy or space capacity method for each category.

2.2. Allocate inventory value to core and seasonal lines.

2.3. Assess risk level of inventory within each category and plan markdown value and stock exit strategy to maximise profitability and maintain inventory at budgeted levels.

2.4. Review promotional plan to determine impacts of planned promotional activity on category planning.

2.5. Identify and hold back a percentage of category plan spend for reaction to trade.

2.6. Document category plan using established organisational systems and processes.

2.7. Obtain input from relevant personnel and make adjustments to category financial plan based on feedback received.

2.8. Finalise category financial plan and gain required approval.

2.9. Communicate category financial plan to relevant personnel to inform range planning and merchandise buying.

3. React to trade.

3.1. Evaluate internal and external factors impacting category performance and make any required adjustments.

3.2. Use action levers to react to in-trade performance.

3.3. Re-plan category financial plan based on sales, inventory and profit values during trade.

3.4. Communicate changes to relevant personnel as required.

Evidence of the ability to complete tasks outlined in elements and performance criteria of this unit in the context of the job role, and:

review a merchandise financial plan to create a category financial plan for one product category across a six-month trading period, using either:

open-to-buy method

space capacity method

document the above category plan detailing:

core and seasonal line spend

sub-category spend

percentage held back for reaction to trade

trial items

key winners

repeat items

deleted items

promotional items

key delivery dates

use action levers to adjust the above category plan in response to the following in trade activity:

seasonal changes

competitor activity

sales decreases

sales increases

supply challenges.

Demonstrated knowledge required to complete the tasks outlined in the elements and performance criteria of this unit:

role and purpose of category financial planning

methods for creating merchandise category plan:

open-to-buy method:

at retail

at cost

space capacity method

internal and external factors impacting category planning:

merchandise strategy

merchandise financial plan

merchandise category structures:

category

sub-category

planned promotional activity

consumer trends

post-trade analysis

open-to-buy

space capacity in stores

like-for-like sales comparisons

stock-quit cycles

stock availability

full price, markdown and promotional

supplier performance

competitor performance

aged stock

category pricing structures and role in category financial planning:

volume

promotional

high-margin

good, better, best

everyday low pricing

values included within a category plan:

core and seasonal line spend

sub-category spend

trial items

key winners

repeat items

deleted items

promotional items

key delivery dates

role of re-forecasting processes

merchandise performance indicators and role in category plan:

sales

gross profit margin

margin mix

purchase margin

markdown value

levers to react to trade:

markdowns

promotions

repeats

re-pricing

competitor review

holding stock

new product trial

stock returns

impacts of, and strategies for, reacting to:

seasonal changes

competitor activity

sales decreases

sales increases

supply challenges

commonly-used merchandise category planning methods within the retail industry.


Submission Requirements

List each assessment task's title, type (eg project, observation/demonstration, essay, assignment, checklist) and due date here

Assessment task 1: [title]      Due date:

(add new lines for each of the assessment tasks)


Assessment Tasks

Copy and paste from the following data to produce each assessment task. Write these in plain English and spell out how, when and where the task is to be carried out, under what conditions, and what resources are needed. Include guidelines about how well the candidate has to perform a task for it to be judged satisfactory.

ELEMENTS

PERFORMANCE CRITERIA

Elements describe the essential outcomes.

Performance criteria describe the performance needed to demonstrate achievement of the element.

1. Determine category planning requirements.

1.1. Access and review organisational merchandise financial plan to determine category financial planning requirements at the category and sub-category level.

1.2. Profile target market and identify relevant trends to optimise sales opportunities within category plan.

1.3. Determine open-to-buy or space capacity for the trading period.

1.4. Determine strategies and pricing structures to achieve gross margin and margin mix.

2. Develop category financial plan.

2.1. Plan and calculate inventory values using open-to-buy or space capacity method for each category.

2.2. Allocate inventory value to core and seasonal lines.

2.3. Assess risk level of inventory within each category and plan markdown value and stock exit strategy to maximise profitability and maintain inventory at budgeted levels.

2.4. Review promotional plan to determine impacts of planned promotional activity on category planning.

2.5. Identify and hold back a percentage of category plan spend for reaction to trade.

2.6. Document category plan using established organisational systems and processes.

2.7. Obtain input from relevant personnel and make adjustments to category financial plan based on feedback received.

2.8. Finalise category financial plan and gain required approval.

2.9. Communicate category financial plan to relevant personnel to inform range planning and merchandise buying.

3. React to trade.

3.1. Evaluate internal and external factors impacting category performance and make any required adjustments.

3.2. Use action levers to react to in-trade performance.

3.3. Re-plan category financial plan based on sales, inventory and profit values during trade.

3.4. Communicate changes to relevant personnel as required.

Copy and paste from the following performance criteria to create an observation checklist for each task. When you have finished writing your assessment tool every one of these must have been addressed, preferably several times in a variety of contexts. To ensure this occurs download the assessment matrix for the unit; enter each assessment task as a column header and place check marks against each performance criteria that task addresses.

Observation Checklist

Tasks to be observed according to workplace/college/TAFE policy and procedures, relevant legislation and Codes of Practice Yes No Comments/feedback
Access and review organisational merchandise financial plan to determine category financial planning requirements at the category and sub-category level. 
Profile target market and identify relevant trends to optimise sales opportunities within category plan. 
Determine open-to-buy or space capacity for the trading period. 
Determine strategies and pricing structures to achieve gross margin and margin mix. 
Plan and calculate inventory values using open-to-buy or space capacity method for each category. 
Allocate inventory value to core and seasonal lines. 
Assess risk level of inventory within each category and plan markdown value and stock exit strategy to maximise profitability and maintain inventory at budgeted levels. 
Review promotional plan to determine impacts of planned promotional activity on category planning. 
Identify and hold back a percentage of category plan spend for reaction to trade. 
Document category plan using established organisational systems and processes. 
Obtain input from relevant personnel and make adjustments to category financial plan based on feedback received. 
Finalise category financial plan and gain required approval. 
Communicate category financial plan to relevant personnel to inform range planning and merchandise buying. 
Evaluate internal and external factors impacting category performance and make any required adjustments. 
Use action levers to react to in-trade performance. 
Re-plan category financial plan based on sales, inventory and profit values during trade. 
Communicate changes to relevant personnel as required. 

Forms

Assessment Cover Sheet

SIRRMRM005 - Develop a category financial plan
Assessment task 1: [title]

Student name:

Student ID:

I declare that the assessment tasks submitted for this unit are my own work.

Student signature:

Result: Competent Not yet competent

Feedback to student

 

 

 

 

 

 

 

 

Assessor name:

Signature:

Date:


Assessment Record Sheet

SIRRMRM005 - Develop a category financial plan

Student name:

Student ID:

Assessment task 1: [title] Result: Competent Not yet competent

(add lines for each task)

Feedback to student:

 

 

 

 

 

 

 

 

Overall assessment result: Competent Not yet competent

Assessor name:

Signature:

Date:

Student signature:

Date: