Question 2: Optimize the Bay A new product is expected to sell 312 units annually (6 units/week on average) and add an incremental $100 in gross margin to the category. However, the planograms are already space constrained. The SKU will ideally be adjacent to SKU A to maintain the merchandising strategy. Holding capacity should range between 2-4 weeks of holding capacity (WOC) for all SKUs to reduce pack down frequency. Analyze the information provided and answer the following questions: 1. How many facings should the new item have? 2. Which SKU(s) reduce facings? 3. Which SKU(s) gain facings? 4. Should any SKU(s) be dropped? 5. What is the new productivity of the bay? SKU Total Curent Capacity R12 Unit Avg Units Capacity Facings Facings Sales Str/Wk Wks of Packdown Holding Frequency Capacity (days) R12 GMS A 24 2 12 2,000 40 00 2.8 4$ 100 00 8 24 2 12 156 3.00 10 56 $65.00 C 12 104 2.00 12.0 145 64.00 D 12 312 6.00 40 25 70.00 E 12 520 12 BS 78.00 A B 8 D E 12 13 336 s 20.00 10 20 145 75.00 10 20.0 25.00 ACCD 10 10 75 85.00 10 56 35 5 65.00 $647.00 G H 1 10 100 00 4 wks of capacity F 0 H 1 3 NEW 24 24 12 12 10 10 10 10 2 2 1 1 1 1 1 1 260 26 520 104 10.00 0.25 5.00 0.50 10.00 6 Total 140