Forecasting is a projection of what is going to happen at a much higher level and includes revenue items, overall expenses, and other business components. People generally make short-term forecasts for operational reasons. Demand forecasting is a critical part of the entire merchandise lifecycle, as the accuracy and timeliness of your forecasts will set the course for the entire selling season. Assortment plans must determine the ideal product ranges and price lines for each unique location, channel and customer segment. Having a merchandise plan is critical for the success of every retail business. Merchandise financial and assortment plans represent the foundation upon which successful merchandise lifecycles are built. It can also point you toward areas where you need to build capacity in order to meet expansion goals. Demand forecasting is a key component to every growing retail business. Merchandise planning step by step process 1. Top 10 Reasons Why Sales Forecasting Is Important. The realism that good forecasting provides can help you develop and improve your strategic plans by increasing your knowledge of the marketplace. Merchandise allocation is the process of determining how to distribute merchandise to individual store units for maximum sales and minimal markdowns. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Without proper demand forecasting processes in place, it can be nearly impossible to have the right amount of stock on hand at any given time. Start studying chapter 12: managing the merchandise planning process. Retail Merchandise Budgeting. Sales forecasting is a key element in conducting your business. Consistently having the right quantities of the right product in the right place at the right price and at the right time is a cornerstone of effective retail merchandising. Accurate demand forecasting is essential for a firm to enable it to produce the required quantities at the right time and arrange well in advance for the various factors of production e.g., raw materials, equipment, machine accessories etc. MARGIN SALES & FORECASTING OPEN TO BUY Merchandising INVENTORY Process MANAGEMENT PERFORMANCE ANALYSIS STOCK ALLOCATION DISTRIBUTION LOCATIONS People FINANCE SUPPLY CHAIN Influences MANAGEMENT REPORTING POS Systems SUPPLIERS MARKETING MERCHANDISING 2. Accurately anticipating demand and aligning stock positions to those demand forecasts can … Forecasting helps a firm to access the probable demand for its products and plan its production accordingly. Forecasts may be short- or long-term. Depending on the size and sophistication of the retail operation, this can be a simple process, or an extremely complex algorithmic exercise. Internal business demand forecasting is a helpful tool for making realistic projections. 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