Page 177 - DMGT550_RETAIL_MANAGEMENT

Retail Management

Notes 2. What type of merchandise to allocate
3. When to allocate the merchandise to different stores.

Did u know? There are several software solutions available in the market to better allocate
merchandise and optimally manage the distribution of inventory across retail outlets.

Purchase Order Management

The purchase order management module generates orders for merchandise to be shipped to the
warehouse(s), distribution centers, and for direct delivery to the stores. In certain instances,
purchase orders can be generated at store level. These orders details will either be sent to the
central system for integration and review, or sent directly to the vendors.
The purchase order management module can maintain or update an “Open to Buy” budget for
a range of suppliers for a given season.

This module supports a comprehensive range of reports and inquiries for monitoring the progress
of outstanding purchase orders and for reporting outstanding financial purchase order
commitment.

Allocation

Allocation is a process for determining the share of each purchase order to be allocated to
individual stores. Allocation can be pre or post. Typically, pre-allocation means that allocation
quantities are determined at the time the PO is written. It can also mean that allocation quantities
are sent, or electronically transmitted, to the vendor prior to shipment of the goods from his
warehouse. The goods are then allocated, packed and shipped by individual store location from
the vendors warehouse to the retailer. The advantage of pre-allocation is the reduction in handling
time required in the retailer’s DC. Pre-allocation is important if warehouse cross docking is to
be implemented, or if direct to store shipping is to be used.
Post-allocation means that the allocation function is performed by the retailer’s distribution
center or central warehouse once the goods are received there. Post-allocation is better for
certain types of merchandise, or when there might be short deliveries or split deliveries into the
warehouse.

Receiving

The goods receiving module captures all goods deliveries, either to the warehouse or to the
stores. The deliveries are input against the relevant purchase order.
Where there are discrepancies, the system allows the retailer to raise a request for credit from
the vendor.
Most systems have the provision of one or two-step goods receipt processes when transferring
inventory between stores or from the warehouse to the store. In the one step process, the
transferred stock quantity is assumed to be the same as the received quantity, and there is no
need for the receiving store to check the delivery. In the two-step process the receiving store
checks the delivery and logs any inventory discrepancies.

Replenishment

Most merchandise management systems provide a replenishment module that generates
suggested replenishment quantities. Inventory is reviewed on a fixed time period basis

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