FSMD 355 Merchandising mathematics

Case Study 2 Calculating Initial Markup and Average Markup Tammy Robinson, Ph.D. and Farrell Doss, Ph.D. Radford University Christy Williams is a recent graduate from Mason College, where she majored in Fashion Merchandising. After several After reviewing the store's figures, Christy produced the interviews, she was pleased to accept a job as Assistant following numbers: During the last quarter, expenses have Store Manager at Kayla's Specialty Store, a small specialty averaged 35%, markdowns have averaged 12%, and profit has averaged 4.5%. The store's planned sales are $325,000. store that sells women's apparel and accessories. She Using this information, Christy must determine the initial retail assists the owner, Mrs. Allen, with purchasing and pricing merchandise. price of the new fall sweaters and blouses . On the fall buying trip, Mrs. Allen purchased two DISCUSSION QUESTIONS FOR CASE STUDY 2 items from one vendor. They included 2 dozen sweaters for the fall season with a cost price of $32 and 3 dozen 1. Using the information provided by Christy, determine the initial markup percent and the initial retail price for the new coordinating blouses with a cost price of $24. Although fall sweaters and blouses. Mrs. Allen felt strongly about these purchases, she did not find a selection of skirts and pants from this vendor to meet 2. Using price information calculated in Question 1, state what actual retail price Christy might suggest for these her customers' needs. fall sweaters and blouses and why she would suggest During the same buying trip, Mrs. Allen discovered a new that price . vendor and was able to secure a great deal on some skirts and pants that can be grouped with the sweaters and blouses 3. What would be the average markup percent for this group- on the sales floor. Twelve skirts were purchased for a cost of ing of sweaters, blouses, skirts, and pants? $20 each. They will retail for $42 each. Also purchased were 4. The store wants to achieve a 51.6% markup. How 18 pairs of pants for $18 each, which will retail for $38 each. does the average markup, that was calculated in Mrs. Allen has asked Christy to calculate the average markup Question 3, compare to the store's goal? What can of this group to ensure the store's planned markup of 51.6% be done to help bring the markup percent closer to the desired goal? will be met. Markup as a Merchandising Tool ! 137