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Evidence Guide: SIRRMRM004 - Develop a merchandise financial plan

Student: __________________________________________________

Signature: _________________________________________________

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SIRRMRM004 - Develop a merchandise financial plan

What evidence can you provide to prove your understanding of each of the following citeria?

Review organisational financial information.

  1. Access and review merchandise strategy to determine financial and merchandise objectives for a specified trading period.
  2. Access and review organisational profit and loss statement to determine organisational financial position and objectives as required.
  3. Review post-trade analysis data to determine past merchandise financial performance.
  4. Source and analyse relevant internal and external factors impacting merchandise financial planning.
  5. Identify merchandise financial planning activity that will maximise profitability and organisational financial performance.
Access and review merchandise strategy to determine financial and merchandise objectives for a specified trading period.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Access and review organisational profit and loss statement to determine organisational financial position and objectives as required.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Review post-trade analysis data to determine past merchandise financial performance.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Source and analyse relevant internal and external factors impacting merchandise financial planning.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Identify merchandise financial planning activity that will maximise profitability and organisational financial performance.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Develop merchandise financial plan.

  1. Plan sales value for the specified trading period using organisational systems and processes.
  2. Determine gross profit margins that meet financial objectives.
  3. Plan markdown value to account for potential markdowns and shrinkage and to minimise profit loss.
  4. Plan optimal inventory values against key performance indicators that maximise profitability and minimise loss.
  5. Review organisational promotional plan to determine impacts of planned promotional activity on sales, inventory and profit planning.
  6. Establish merchandise performance indicators.
  7. Document sales, inventory and profit values using established organisational systems and processes.
  8. Obtain input from relevant personnel and make adjustments to merchandise financial plan based on feedback received.
  9. Finalise merchandise financial plan and gain approval as required.
  10. Communicate merchandise financial plan to relevant personnel.
Plan sales value for the specified trading period using organisational systems and processes.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Determine gross profit margins that meet financial objectives.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Plan markdown value to account for potential markdowns and shrinkage and to minimise profit loss.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Plan optimal inventory values against key performance indicators that maximise profitability and minimise loss.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Review organisational promotional plan to determine impacts of planned promotional activity on sales, inventory and profit planning.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Establish merchandise performance indicators.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Document sales, inventory and profit values using established organisational systems and processes.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

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

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Finalise merchandise financial plan and gain approval as required.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Communicate merchandise financial plan to relevant personnel.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Review and re-plan merchandise financial plan.

  1. Review in-trade financial performance against actual and budgeted sales, profit and inventory values.
  2. Investigate and account for variances in sales, inventory and profit values.
  3. Identify available rebates and incorporate into merchandise financial plan as required.
  4. Re-plan sales, profit and inventory values in response to the actual sales results.
  5. Re-plan sales, profit and inventory values in response to internal and external influences on performance.
Review in-trade financial performance against actual and budgeted sales, profit and inventory values.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Investigate and account for variances in sales, inventory and profit values.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Identify available rebates and incorporate into merchandise financial plan as required.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Re-plan sales, profit and inventory values in response to the actual sales results.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Re-plan sales, profit and inventory values in response to internal and external influences on performance.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Assessed

Teacher: ___________________________________ Date: _________

Signature: ________________________________________________

Comments:

 

 

 

 

 

 

 

 

Instructions to Assessors

Evidence Guide

ELEMENTS

PERFORMANCE CRITERIA

Elements describe the essential outcomes.

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

1. Review organisational financial information.

1.1. Access and review merchandise strategy to determine financial and merchandise objectives for a specified trading period.

1.2. Access and review organisational profit and loss statement to determine organisational financial position and objectives as required.

1.3. Review post-trade analysis data to determine past merchandise financial performance.

1.4. Source and analyse relevant internal and external factors impacting merchandise financial planning.

1.5. Identify merchandise financial planning activity that will maximise profitability and organisational financial performance.

2. Develop merchandise financial plan.

2.1. Plan sales value for the specified trading period using organisational systems and processes.

2.2. Determine gross profit margins that meet financial objectives.

2.3. Plan markdown value to account for potential markdowns and shrinkage and to minimise profit loss.

2.4. Plan optimal inventory values against key performance indicators that maximise profitability and minimise loss.

2.5. Review organisational promotional plan to determine impacts of planned promotional activity on sales, inventory and profit planning.

2.6. Establish merchandise performance indicators.

2.7. Document sales, inventory and profit values using established organisational systems and processes.

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

2.9. Finalise merchandise financial plan and gain approval as required.

2.10. Communicate merchandise financial plan to relevant personnel.

3. Review and re-plan merchandise financial plan.

3.1. Review in-trade financial performance against actual and budgeted sales, profit and inventory values.

3.2. Investigate and account for variances in sales, inventory and profit values.

3.3. Identify available rebates and incorporate into merchandise financial plan as required.

3.4. Re-plan sales, profit and inventory values in response to the actual sales results.

3.5. Re-plan sales, profit and inventory values in response to internal and external influences on performance.

Required Skills and Knowledge

ELEMENTS

PERFORMANCE CRITERIA

Elements describe the essential outcomes.

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

1. Review organisational financial information.

1.1. Access and review merchandise strategy to determine financial and merchandise objectives for a specified trading period.

1.2. Access and review organisational profit and loss statement to determine organisational financial position and objectives as required.

1.3. Review post-trade analysis data to determine past merchandise financial performance.

1.4. Source and analyse relevant internal and external factors impacting merchandise financial planning.

1.5. Identify merchandise financial planning activity that will maximise profitability and organisational financial performance.

2. Develop merchandise financial plan.

2.1. Plan sales value for the specified trading period using organisational systems and processes.

2.2. Determine gross profit margins that meet financial objectives.

2.3. Plan markdown value to account for potential markdowns and shrinkage and to minimise profit loss.

2.4. Plan optimal inventory values against key performance indicators that maximise profitability and minimise loss.

2.5. Review organisational promotional plan to determine impacts of planned promotional activity on sales, inventory and profit planning.

2.6. Establish merchandise performance indicators.

2.7. Document sales, inventory and profit values using established organisational systems and processes.

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

2.9. Finalise merchandise financial plan and gain approval as required.

2.10. Communicate merchandise financial plan to relevant personnel.

3. Review and re-plan merchandise financial plan.

3.1. Review in-trade financial performance against actual and budgeted sales, profit and inventory values.

3.2. Investigate and account for variances in sales, inventory and profit values.

3.3. Identify available rebates and incorporate into merchandise financial plan as required.

3.4. Re-plan sales, profit and inventory values in response to the actual sales results.

3.5. Re-plan sales, profit and inventory values in response to internal and external influences on performance.

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 merchandise and organisational financial data to develop a month-by-month merchandise financial plan for a six-month trading period that includes:

sales

gross margin profit

buying margin

markdown value

inventory values

performance indicators

re-plan sales, profit and inventory values based on actual merchandise performance and in response to:

internal factors impacting merchandise performance

external factors impacting merchandise performance

review merchandise financial plan against performance indicators and make recommendations for future improvement.

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

merchandise financial planning:

purpose

impact on organisational profit and loss

role in determining:

open-to-buy

space capacity planning

key financial values:

inventory

sales

profit

role of post-trade analysis data in developing merchandise financial plan

common types and applications of merchandise planning processes:

bottom-up

top-down

key merchandise financial planning strategies to:

maximise profitability

minimise loss

merchandise performance indicators, how they are calculated, and role in merchandise planning:

sales

gross profit margin

Gross Margin Return on Investment

sell-through rate

stock turn

forward cover

purchase margin

markdown percentage

internal and external factors impacting merchandise planning:

percentage increase or decrease on last year

promotional activity

consumer behaviour

competitor activity

store openings

store closures

store refurbishments

online strategy

economic factors

critical path

aged stock and impact on inventory and profitability

merchandise reductions and how they are incorporated into the merchandise plan:

markdowns

inventory shrinkage

rebates and impact on merchandise financial plan

responses to in-trade activity:

re-forecasting

accounting for variances in:

sales

inventory

profit

commonly used merchandise planning methods within the retail industry:

formats and structures

systems.