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Keith Dunn: Chapter 7.2.14 Calculated metrics (Continued)
Posted On: 06-04-2009 04:37:52 AM


7.2.14 RATE OF SALE

Rate of Sale is the average unit sales per option per outlet per week for all outlets stocking the option. Since it removes the effects of distribution it is a better measure of option and product performance than absolute sales.

RATE OF SALE = SALES UNITS ÷ OUTLETS WITH STOCK ÷ WEEKS ON SALE

EXAMPLE WEEK 1 WEEK 2 WEEK 3 AVERAGE
SALES UNITS 200 200 250 650
OUTLETS WITH STOCK 100 80 100 280
CALCULATION 200 ÷ 100 ÷ 1 200 ÷ 80 ÷ 1 250 ÷ 100 ÷ 1 650 ÷ 280 ÷ 3
RATE OF SALE 2.00 2.50 2.50 2.32



For the purposes of calculating the Rate of Sale an Outlet is deemed to have stock even if it is only holding a single unit.

This calculation works even if there are multiple options since the Outlets with Stock shows how many instances there are of an Option in an Outlet.

EXAMPLE WEEK 1 WEEK 2 WEEK 3 AVERAGE
SALES UNITS OPTION 1 200 200 250 650
OUTLETS WITH STOCK OPTION 2 100 80 100 280
SALES UNITS OPTION 1 100 120 130 350
OUTLETS WITH STOCK OPTION 2 75 75 75 225
TOTAL SALES UNITS 300 320 380 1,000
TOTAL OUTLETS 175 155 175 505
CALCULATION 300 ÷ 175 ÷ 1 320 ÷ 155 ÷ 1 380 ÷ 175 ÷ 1 1,000 ÷ 505 ÷ 3
RATE OF SALE 1.71 2.06 2.17 1.98



7.2.15 FULL PRICE SELL THROUGH %

Full Price Sell Through % shows the proportion of the Total Buy Units sold at full or promotional price during the full season. Full Price Sell Through % has a direct relationship with Markdown % - the lower the former the higher the latter.

FULL PRICE SELL THROUGH % = (FULL PRICE SALES UNITS + PROMOTIONAL SALES UNITS) ÷ TOTAL BUY UNITS

EXAMPLE CALCULATION RESULT
TOTAL BUY UNITS   10,000
FULL PRICE SALES UNITS   7,200
FULL PRICE SELL THROUGH % 7,200 ÷ 10,000 72.0%



7.2.16 AVERAGE SELLING PRICE

The average original, full price, promotional, markdown and net selling prices.

AVERAGE ORIGINAL SELLING PRICE = TOTAL INTAKE VALUE ÷ TOTAL INTAKE UNITS

AVERAGE FULL PRICE SELLING PRICE = FULL PRICE SALES VALUE ÷ FULL PRICE SALES UNITS

AVERAGE PROMOTIONAL PRICE= PROMOTIONAL SALES VALUE ÷ PROMOTIONAL SALES UNITS

AVERAGE MARKDOWN PRICE = MARKDOWN SALES VALUE ÷ MARKDOWN SALES UNITS

AVERAGE NET SELLING PRICE = TOTAL SALES VALUE ÷ TOTAL SALES UNITS

Note that Sales Values are recorded after Other Discounts have been deducted. The average price is therefore that which was actually paid by the customer.

EXAMPLE VALUE UNITS   CALCULATION RESULT
INTAKE 30,000 3,000 ORIGINAL S.P. 30,000 ÷ 3,000 £10.00
FULL PRICE SALES 19,000 2,000 FULL PRICE S.P. 19,000 ÷ 2,000 £9.50
MARKDOWN SALES 7,000 1,000 MARKDOWN S.P 7,000 ÷ 1,000 £7.00
TOTAL SALES 26,000 3,000 NET S.P. 26,000 ÷ 3,000 £8.67



7.2.17 AVAILABILITY

Availability is used to measure distribution effectiveness and to identify the possible causes of under-performance or missed potential.

There are two availability measures, Stock Availability % which shows whether the core sizes of an option are in-stock throughout its’ primary lifecycle, and Option Availability %, which shows whether an outlet is holding the planned number of options.

STOCK AVAILABILITY % = (ACTUAL STOCK UNITS ÷ TARGET STOCK UNITS)%

EXAMPLE WEEK 1 WEEK 2 AVERAGE
ACTUAL STOCK UNITS 750 1,100 1,850
TARGET STOCK UNITS 1,000 1,000 2000
CALCULATION 750 ÷ 1,000 1,100 ÷ 1,000 1,850 ÷ 2,000
STOCK AVAILABILITY % 75% 110% 92.5%



The stock availability immediately prior to a clearance event is sometimes known as the Final Availability and is a measure of risk – if it is too low full price sales may not have been potentialised. Final Availability is the inverse of the Full Price Sell Through %

OPTION AVAILABILITY % = ACTUAL OPTIONS IN STOCK ÷ PLANNED OPTIONS IN STOCK

An option is ‘in stock’ if the stock held is above a specified minimum

 
 
 

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