Your assignment is to assist Jim in the preparation of a merchandise budget plan. First, fill out the merchandise budget form for six months. You may use either the form accompanying this case or the spreadsheet located in Connect ™. Then, on a separate sheet of paper, type and double-space a brief but specific explanation of how you derived the following:

Adjustments to percentage distribution of sales by month.

I. Sales forecast

II. Adjustments to percentage distribution of sales by month

III. Stock-to-Sales ratios

Synopsis:   This is a difficult case for students to grasp, but we think it is well worth the trouble because it illustrates the relationship between the sales forecast, the seasonality pattern, inventory turnover, and the stock-to-sales ratios. We find it beneficial to walk the students through the case line by line during the class period preceding the class in which it is due.