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Evidence Guide: SIRRMRM005 - Develop a category financial plan

Student: __________________________________________________

Signature: _________________________________________________

Tips for gathering evidence to demonstrate your skills

The important thing to remember when gathering evidence is that the more evidence the better - that is, the more evidence you gather to demonstrate your skills, the more confident an assessor can be that you have learned the skills not just at one point in time, but are continuing to apply and develop those skills (as opposed to just learning for the test!). Furthermore, one piece of evidence that you collect will not usualy demonstrate all the required criteria for a unit of competency, whereas multiple overlapping pieces of evidence will usually do the trick!

From the Wiki University

 

SIRRMRM005 - Develop a category financial plan

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

Determine category planning requirements.

  1. Access and review organisational merchandise financial plan to determine category financial planning requirements at the category and sub-category level.
  2. Profile target market and identify relevant trends to optimise sales opportunities within category plan.
  3. Determine open-to-buy or space capacity for the trading period.
  4. Determine strategies and pricing structures to achieve gross margin and margin mix.
Access and review organisational merchandise financial plan to determine category financial planning requirements at the category and sub-category level.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

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

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

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

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

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

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Develop category financial plan.

  1. Plan and calculate inventory values using open-to-buy or space capacity method for each category.
  2. Allocate inventory value to core and seasonal lines.
  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.
  4. Review promotional plan to determine impacts of planned promotional activity on category planning.
  5. Identify and hold back a percentage of category plan spend for reaction to trade.
  6. Document category plan using established organisational systems and processes.
  7. Obtain input from relevant personnel and make adjustments to category financial plan based on feedback received.
  8. Finalise category financial plan and gain required approval.
  9. Communicate category financial plan to relevant personnel to inform range planning and merchandise buying.
Plan and calculate inventory values using open-to-buy or space capacity method for each category.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Allocate inventory value to core and seasonal lines.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

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.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

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

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

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

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Document category plan using established organisational systems and processes.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

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

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Finalise category financial plan and gain required approval.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

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

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

React to trade.

  1. Evaluate internal and external factors impacting category performance and make any required adjustments.
  2. Use action levers to react to in-trade performance.
  3. Re-plan category financial plan based on sales, inventory and profit values during trade.
  4. Communicate changes to relevant personnel as required.
Evaluate internal and external factors impacting category performance and make any required adjustments.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Use action levers to react to in-trade performance.

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

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

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Communicate changes to relevant personnel as required.

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. 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.

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. 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.