Page 134 - DMGT554_RETAIL_BUYING

Unit 9: Buying Decisions

at $0.95 each. Industrial Supply offers its customers a trade discount of 10% on all purchases, Notes
and terms of 2/10 eom. All merchandise is shipped to customers via track FOB destination.

Using the terms provided by the two suppliers, Mike must decide which company offers
him the best opportunity to achieve his store’s policy. Mike plans to place an order for the
following quantities of merchandise:
40 pounds
28 pounds
42 feet

57 feet
96
assorted machine bolts and nuts
assorted wood screws

-inch threaded steel rod
3/8-inch threaded steel rod
3-inch brass plated hinges
Dillon’s Hardware remits payment for all merchandise purchased on credit within the
terms offered by its suppliers to reduce the cost of its purchases.
Question
If the merchandise is of equal quality and the location of the two suppliers, result in
similar transportation costs and delivery terms, with which supplier should Mike place
his fastener order?

Source: http://wps.prenhall.com/chet_rogers_mathematic_1/42/10876/2784386.cw/index.html

9.5 Summary

 Retailers can source their merchandise from manufacturers or produce their own store
brands, called private labels.

 The merchandise purchasing process consists of five steps: identifying the sources of
supply, contacting the sources of supply, evaluating the sources of supply, negotiating
with the sources of supply, and purchasing from the sources of supply.
 Buyer decision processes are the decision making processes undertaken by consumers in
regard to a potential market transaction before, during, and after the purchase of a product
or service.
 There are five stages which a consumer often goes through when he/she around their
purchase. These five sates are problem/need recognition, information search, evaluation
of purchase, and post purchase behaviour.

 The important items to be considered monthly when developing your six-month
merchandise plan are net sales, stock, reductions, purchases and open-to-buy.
 The selling plan should detail when the items should be promoted through advertising,
window and interior displays, etc.; when the inventory should be peaked; when reorders
should no longer be placed; when markdowns from regular stock should be taken; and
when the item should no longer be in stock.

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