Step One: Define your Departments – Be defined enough so you have good information, but not so defined that you’re hamstrung when you go to market.
Step Two: Set up a Sales Projection in each department for each month for the next 12 months.
Step Three: Establish Turn Rates for each department and adjust them to reflect the sales impact of each month.
Step Four: Establish Ideal Beginning Inventory levels for each department for each month for the next 12 months based on your Projected Sales and Desired Turn Rates.
Step Five: Do the Open To Buy Calculations to determine how much you should buy in each department for each month for the next 12 months.
Step Six: Subtract any Orders placed against your buying plan in each department for each delivery month for the next 12 months.
Step Seven: At the close of each month, Analyze your actual sales, beginning inventory and turnover vs. your projected sales, beginning inventory and turnover in each department for the month just completed and determine if you are seeing trends and need to make revisions.
Step Eight: Make the revisions and recalculate your Open To Buy plan (as above).
Nothing to it, right? Then why are you still guessing? Well, yes, it’s a lot of work, but with myotbplan.com, it’s practically done for you. We guide you step-by-step to put in your numbers and we make all the adjustments and do all the calculations. Piece of cake!
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