Page 117 - DMGT553_RETAIL_STORE_MANAGEMENT

Retail Store Management

Notes Under weighted average price method, the calculation can be done for different periods. If the
calculation is done on a monthly basis, then it is referred to the periodic method. In this method,
the available stock is calculated by:
ADD Stock at beginning of period

ADD Stock purchased during the period
AVERAGE total cost by total quantity to arrive at the Average Cost of Goods for the
period.

This Average Cost Price is applied to all movements and adjustments in that period. Ending
stock in quantity is arrived at by applying all the changes in quantity to the Available balance.
Multiplying the stock balance in quantity by the Average cost gives the Stock cost at the end of
the period.

Using the perpetual method, the calculation is done upon every purchase transaction.
Thus, the calculation is the same based on the periodic calculation whether by period (periodic)
or by transaction (perpetual).
The only difference is the ‘periodicity’ or scope of the calculation – Periodic is done monthly –
Perpetual is done for the duration of the purchase until the next purchase.
In practice, the daily averaging has been used to closely approximate the perpetual method.
Bottle neck method depends on proper planning support.

Self Assessment

State whether the following statements are true or false:

10. The management of the inventory in the supply chain exclude managing the physical
quantities as well as the costing of the goods as it flows through the supply chain.
11. Under weighted average price method, the calculation can be done for different periods.

7.5 Cleanliness

Cleanliness in Indian retail industry is of paramount importance. It is no more treated as a
luxury expense. With the use of mops, microfibre, scrubber drier machines, cleanliness in retail
has gone to the next level. In this context, we would like to extend some related tips to the
readers on how cleanliness and hygiene in retail can impact the shopper/a potential customer to
visit the store, when he/she has widely available options elsewhere.
Any store may have fabulous merchandise to sell, but if the store is dirty and cleanliness &
hygiene is not maintained, will leave a very bad impression with the customer. Following are
some of the points for maintaining consistent cleaning and hygiene:
First Impression Counts

Store name board and logo at the entrance should be neatly maintained
Parking area should be clean of litter and brightly lit (at nights)
Entrance should be clean and inviting
Security check points should be free from litter and should be presentable

112 LOVELY PROFESSIONAL UNIVERSITY