8/9/2019 Retail_QA

1/17

ContentsWhat is Retail?............................................................................................................ 3

Who are Retailers?...................................................................................................... 3

What is Retail Management?.............................................................................. ........ 3 Types of Products in Retail?............................................................................... ......... 4

What is Supply Chain?................................................................................................ 4

Retail Outlets Types?........................................................................................... .......

What is Pricing?..................................................................................................... ..... !

What is Margin?.......................................................................................................... !

What is "nit?........................................................................................................ ...... #

What is $ase %o&n Pricing?......................................................................... .............. #

What is Price %iscrimination?......................................................................... ............ #

What is Retail Price %iscrimination?.................................................................... ....... #

What are Coupons?......................................................................................... ........... '

What is %emand Optimi(ation?................................................................................. . '

What are discounts and allo&ances?..........................................................................'

What are Cash %iscounts and Trade %iscounts?......................................................... )

What is Retail Pricing?............................................................................................. ... )

What is Mar* %o&n Price?.......................................................................... .............. .. )

What is Mar* "p Price?............................................................................................... )

What is Pantry +oading?............................................................................... ............ ,-

What is S "?...................................................................................................... ...... ,-

What are /0COT1RMS?.................................................................................. ........... ,-

What is 2O$?...................................................................................................... ...... ,,

What is C/2?.............................................................................................................. ,,

What is C2R?........................................................................................ .............. ...... ,,

What is % 2?.................................................................................................. .......... ,

What is % P?....................................................................................................... ..... ,

What is 2C ?...................................................................................... .............. ........ ,

What are Promotions?................................................................................. ............. ,

What are %iscounts and allo&ances?................................................................... .... ,3

What is 2orecasting?................................................................................... ............. ,3

What is Price 1lasticity?............................................................................................ ,4

What is Competitor Pricing?...................................................................... .............. . ,4

,

8/9/2019 Retail_QA

2/17

What is Margin nalysis?.......................................................................................... ,4

What is Price Per "nit?.............................................................................................. ,

What is Retail? The sale of good and ser5ices to an end user

8/9/2019 Retail_QA

3/17

The sale of goods to the pu6lic in relati5ely small 7uantities for useor consumption rather than for resale.

Who are Retailers? Retailers are a part of an integrated system called the supply chain retailer purchases goods or products in large 7uantities

from manufacturers directly or through a &holesale8 and then sellssmaller 7uantities to the consumer for a pro9t.

Retailing can 6e done in either 9:ed locations li*e stores ormar*ets8 door;to;door or 6y deli5ery

The term

8/9/2019 Retail_QA

4/17

Types of Products in Retail?

2ood products= They re7uire cold storage facilities.

>ard goods or dura6le goods= automo6iles 8 appliances 8 electronics 8 furniture 8 sporting goods 8

lum6er 8 etc.8 and parts for them are >ard oods. oods that do not7uic*ly &ear out and pro5ide utility o5er time.

Soft goods or consuma6les = Such as clothing other fa6rics 8 foot&ear 8 cosmetics 8 medicines and stationery . oodsthat are consumed after one use or ha5e a limited period @typicallyunder three yearsA in &hich you may use them.

rts= Contemporary art galleries 8 $oo*stores 8 >andicrafts 8 Musicalinstruments 8 ift shops 8 and supplies for them.

What is Supply Chain? /t is the process or a se7uence of processes in5ol5ed in the

production and distri6ution of a commodity.

4

http://en.wikipedia.org/wiki/Automobileshttp://en.wikipedia.org/wiki/Home_appliancehttp://en.wikipedia.org/wiki/Electronicshttp://en.wikipedia.org/wiki/Furniturehttp://en.wikipedia.org/wiki/Sporting_goodshttp://en.wikipedia.org/wiki/Lumberhttp://en.wikipedia.org/wiki/Clothinghttp://en.wikipedia.org/wiki/Fabricshttp://en.wikipedia.org/wiki/Footwearhttp://en.wikipedia.org/wiki/Cosmeticshttp://en.wikipedia.org/wiki/Medicineshttp://en.wikipedia.org/wiki/Stationeryhttp://en.wikipedia.org/wiki/Contemporary_art_gallerieshttp://en.wikipedia.org/wiki/Bookstoreshttp://en.wikipedia.org/wiki/Handicraftshttp://en.wikipedia.org/wiki/Musical_instrumentshttp://en.wikipedia.org/wiki/Musical_instrumentshttp://en.wikipedia.org/wiki/Gift_shopshttp://en.wikipedia.org/wiki/Automobileshttp://en.wikipedia.org/wiki/Home_appliancehttp://en.wikipedia.org/wiki/Electronicshttp://en.wikipedia.org/wiki/Furniturehttp://en.wikipedia.org/wiki/Sporting_goodshttp://en.wikipedia.org/wiki/Lumberhttp://en.wikipedia.org/wiki/Clothinghttp://en.wikipedia.org/wiki/Fabricshttp://en.wikipedia.org/wiki/Footwearhttp://en.wikipedia.org/wiki/Cosmeticshttp://en.wikipedia.org/wiki/Medicineshttp://en.wikipedia.org/wiki/Stationeryhttp://en.wikipedia.org/wiki/Contemporary_art_gallerieshttp://en.wikipedia.org/wiki/Bookstoreshttp://en.wikipedia.org/wiki/Handicraftshttp://en.wikipedia.org/wiki/Musical_instrumentshttp://en.wikipedia.org/wiki/Musical_instrumentshttp://en.wikipedia.org/wiki/Gift_shops

8/9/2019 Retail_QA

5/17

supply chain is a system of organi(ations8 people8 acti5ities8information8 and resources in5ol5ed in mo5ing a product or ser5icefrom supplier to customer

Retail Outlets Types? %epartment store= %epartment stores are 5ery large stores oBering

a huge assortment of

8/9/2019 Retail_QA

6/17

Con5enience store= con5enience store pro5ides limited amount ofmerchandise at more than a5erage prices &ith a speedy chec*out.

This store is ideal for emergency and immediate purchases as itoften &or*s &ith e:tended hours8 stoc*ing e5eryday

What is Pricing? Pricing is the process of determining &hat a company &ill

recei5e in e:change for its product or ser5ice. Pricing factors are manufacturing cost 8 mar*et place8

competition8 mar*et condition8 6rand 8 and 7uality of product. Pricing is also a *ey 5aria6le in microeconomic price allocation

theory. Pricing is a fundamental aspect of 9nancialmodeling and is one of the four Ps of the mar*eting mi: .

The other three aspects are product8 promotion8 and place . Price is the only re5enue generating element amongst the four

Ps8 the rest 6eing cost centers . >o&e5er8 the other Ps of mar*eting &ill contri6ute to

decreasing price elasticity and so ena6le price increases todri5e greater re5enue and pro9ts.

What is Margin? ross margin is the diBerence

6et&een re5enue and cost 6efore accounting for certain othercosts.

/t is calculated as the selling price of an item8 less the cost ofgoods sold

/n economics 8 a margin is a set of constraints conceptuali(ed asa 6order .

marginal change is the change associated &ith a rela:ationor tightening of constraints either change of the constraints8 ora change in response to this change of the constraints.

n e:tensi5e margin corresponds to the num6er of usa6leinputs that are in some sense employed.

1:= >iring an additional &or*er &ould increase an e:tensi5emargin.

!

http://en.wikipedia.org/wiki/Convenience_storehttp://en.wikipedia.org/wiki/Manufacturing_costhttp://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Microeconomichttp://en.wikipedia.org/wiki/Financial_modelinghttp://en.wikipedia.org/wiki/Financial_modelinghttp://en.wikipedia.org/wiki/Four_Pshttp://en.wikipedia.org/wiki/Marketing_mixhttp://en.wikipedia.org/wiki/Distribution_(business)http://en.wikipedia.org/wiki/Cost_center_(business)http://en.wikipedia.org/wiki/Price_elasticityhttp://en.wikipedia.org/wiki/Revenuehttp://en.wikipedia.org/wiki/Costhttp://en.wikipedia.org/wiki/Cost_of_goods_soldhttp://en.wikipedia.org/wiki/Cost_of_goods_soldhttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Constraint_(mathematics)http://en.wikipedia.org/wiki/Convenience_storehttp://en.wikipedia.org/wiki/Manufacturing_costhttp://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Microeconomichttp://en.wikipedia.org/wiki/Financial_modelinghttp://en.wikipedia.org/wiki/Financial_modelinghttp://en.wikipedia.org/wiki/Four_Pshttp://en.wikipedia.org/wiki/Marketing_mixhttp://en.wikipedia.org/wiki/Distribution_(business)http://en.wikipedia.org/wiki/Cost_center_(business)http://en.wikipedia.org/wiki/Price_elasticityhttp://en.wikipedia.org/wiki/Revenuehttp://en.wikipedia.org/wiki/Costhttp://en.wikipedia.org/wiki/Cost_of_goods_soldhttp://en.wikipedia.org/wiki/Cost_of_goods_soldhttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Constraint_(mathematics)

8/9/2019 Retail_QA

7/17

n intensi5e margin corresponds to the amount of usee:tracted &ithin a gi5en e:tensi5e margin.

1:= Reducing re7uired production from a gi5en set of &or*ers

&ould decrease the intensi5e margin. The purpose of margins is

8/9/2019 Retail_QA

8/17

cost for the diBerently priced products in5ol5ed in the latterstrategy.

Price diBerentiation essentially relies on the 5ariation in the6uyersI &illingness to pay .

What is Retail Price %iscrimination? Price for &hich manufacturers of goods to sell their products to

similarly situated retailers at diBerent prices 6ased solely on the5olume of products purchased.

What are Coupons? The use of coupons in retail is an attempt to distinguish

customers 6y their reser5e price. The assumption is that people &ho go through the trou6le of

collecting coupons ha5e greater price sensiti5ity than those &hodo not.

1:= Ma*ing coupons a5aila6le ena6les8 for instance 6rea*fastcereal ma*ers to charge higher prices to price;insensiti5ecustomers8 &hile still ma*ing some pro9t oB customers &ho aremore price;sensiti5e .

What is %emand Optimi(ation?

%emand optimi(ation is the application of processes and tools to

ma:imi(e return on sales .

/t usually in5ol5es the application of mathematical modeling

techni7ues using computer soft&are.

/t has particular applications in retail 8 &here merchants &ish toidentify the 6est com6ination of price and promotion to achie5edesired sales8 gross margin 8 in5entory or mar*et share o6Jecti5es.

'

http://en.wikipedia.org/wiki/Production_costhttp://en.wikipedia.org/wiki/Willingness_to_payhttp://en.wikipedia.org/wiki/Return_on_saleshttp://en.wikipedia.org/wiki/Retailhttp://en.wikipedia.org/wiki/Pricehttp://en.wikipedia.org/wiki/Promotion_(marketing)http://en.wikipedia.org/wiki/Gross_marginhttp://en.wikipedia.org/wiki/Market_sharehttp://en.wikipedia.org/wiki/Production_costhttp://en.wikipedia.org/wiki/Willingness_to_payhttp://en.wikipedia.org/wiki/Return_on_saleshttp://en.wikipedia.org/wiki/Retailhttp://en.wikipedia.org/wiki/Pricehttp://en.wikipedia.org/wiki/Promotion_(marketing)http://en.wikipedia.org/wiki/Gross_marginhttp://en.wikipedia.org/wiki/Market_share

8/9/2019 Retail_QA

9/17

What are discounts and allo&ances?

%iscounts and allo&ances are reductions to a 6asic price of goods orser5ices.

They can occur any&here in the distri6ution channel 8 modifyingeither the manufacturerDs list price @determined 6y themanufacturer and often printed on the pac*ageA8 the retail price @set6y the retailer and often attached to the product &ith a stic*erA8 orthe list price @&hich is 7uoted to a potential 6uyer8 usually in &rittenformA.

There are many purposes for discounting=

Some of these include= to increase short;term sales8 to mo5e out;of;date stoc*8 to re&ard 5alua6le customers8 to encourage distri6utionchannel mem6ers to perform a function8 or to other&ise re&ard6eha5iors that 6ene9t the discount issuer.

Some discounts and allo&ances are forms of sales promotion .

What are Cash %iscounts and Trade %iscounts? Trade %iscounts=

These are deductions in price gi5en 6y the&holesaler or manufacturer to the retailer at the list price orcatalogue price.

Cash %iscounts=

These are reductions in price gi5en 6y the creditor to thede6tor. These discounts are intended to speed payment andthere6y pro5ide li7uidity to the 9rm.

What is Retail Pricing? The pricing techni7ue used 6y most retailers is cost;plus pricing .

)

http://en.wikipedia.org/wiki/Pricehttp://en.wikipedia.org/wiki/Distribution_channelhttp://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Distribution_(business)http://en.wikipedia.org/wiki/Distribution_(business)http://en.wikipedia.org/wiki/Sales_promotionhttp://en.wikipedia.org/wiki/Wholesalerhttp://en.wikipedia.org/wiki/Manufacturerhttp://en.wikipedia.org/wiki/Retailerhttp://en.wikipedia.org/wiki/List_pricehttp://en.wikipedia.org/wiki/Creditorhttp://en.wikipedia.org/wiki/Liquidityhttp://en.wikipedia.org/wiki/Pricinghttp://en.wikipedia.org/wiki/Cost-plus_pricinghttp://en.wikipedia.org/wiki/Pricehttp://en.wikipedia.org/wiki/Distribution_channelhttp://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Distribution_(business)http://en.wikipedia.org/wiki/Distribution_(business)http://en.wikipedia.org/wiki/Sales_promotionhttp://en.wikipedia.org/wiki/Wholesalerhttp://en.wikipedia.org/wiki/Manufacturerhttp://en.wikipedia.org/wiki/Retailerhttp://en.wikipedia.org/wiki/List_pricehttp://en.wikipedia.org/wiki/Creditorhttp://en.wikipedia.org/wiki/Liquidityhttp://en.wikipedia.org/wiki/Pricinghttp://en.wikipedia.org/wiki/Cost-plus_pricing

8/9/2019 Retail_QA

10/17

Cost plus pricing in5ol5es adding a mar*up amount @or percentageA

to the retailerDs cost. nother common techni7ue is suggested retail pricing . This simply

in5ol5es charging the amount suggested 6y the manufacturer and

usually printed on the product 6y the manufacturer.

What is Mar* %o&n Price? Temporary reduction in the selling price of an item to stimulate

its demand or to dri5e a competitor out of the mar*et . Permanentmar*do&ns are created to remo5e a slo&;selling item from the in5entory .

reduction in price8 usually to encourage 6uying. The amount 6y &hich a price is reduced. 1:= Seasonal %iscounts8 Kear; end Sales and also sometimes clearance

sales in certain stores

What is Mar* "p Price? Mar*up is the diBerence 6et&een the cost of a good or ser5ice and its selling

price mar*up is added onto the total cost incurred 6y the producer of a good or

ser5ice in order to create a pro9t The total cost reLects the total amount of 6oth 9:ed and 5aria6le e:penses to

produce and distri6ute a product . Mar*up can 6e e:pressed as a 9:ed amountor as a percentage of the total cost or selling price.

Markup = Sale price Cost

,. What is Cost Plus Pricing?

Cost;plus pricing pricing strategy is the application of a6solute or percentage

mar*;up on the cost price of a product to determine the selling price. 2irms may achie5e pro9t ma:imi(ation 6y increasing their production until

their marginal re5enue e7uals their marginal cost8 then charging a pricedetermined 6y the demand cur5e on the cost

Cost;plus pricing is also *no&n as mar*;up pricing &hereCost mar*;up F selling price.

,-

http://en.wikipedia.org/wiki/Markup_(business)http://en.wikipedia.org/wiki/Suggested_retail_pricehttp://en.wikipedia.org/wiki/Product_(business)http://www.businessdictionary.com/definition/reduction.htmlhttp://www.businessdictionary.com/definition/selling-price.htmlhttp://www.businessdictionary.com/definition/demand.htmlhttp://www.businessdictionary.com/definition/drive.htmlhttp://www.businessdictionary.com/definition/competitor.htmlhttp://www.businessdictionary.com/definition/market.htmlhttp://www.businessdictionary.com/definition/inventory.htmlhttp://en.wikipedia.org/wiki/Costhttp://en.wikipedia.org/wiki/Good_(economics)http://en.wikipedia.org/wiki/Service_(economics)http://en.wikipedia.org/wiki/Profit_(accounting)http://en.wikipedia.org/wiki/Fixed_costhttp://en.wikipedia.org/wiki/Variable_costhttp://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Pricing_strategieshttp://en.wikipedia.org/wiki/Profit_maximizationhttp://en.wikipedia.org/wiki/Markup_(business)http://en.wikipedia.org/wiki/Suggested_retail_pricehttp://en.wikipedia.org/wiki/Product_(business)http://www.businessdictionary.com/definition/reduction.htmlhttp://www.businessdictionary.com/definition/selling-price.htmlhttp://www.businessdictionary.com/definition/demand.htmlhttp://www.businessdictionary.com/definition/drive.htmlhttp://www.businessdictionary.com/definition/competitor.htmlhttp://www.businessdictionary.com/definition/market.htmlhttp://www.businessdictionary.com/definition/inventory.htmlhttp://en.wikipedia.org/wiki/Costhttp://en.wikipedia.org/wiki/Good_(economics)http://en.wikipedia.org/wiki/Service_(economics)http://en.wikipedia.org/wiki/Profit_(accounting)http://en.wikipedia.org/wiki/Fixed_costhttp://en.wikipedia.org/wiki/Variable_costhttp://en.wikipedia.org/wiki/Product_(business)http://en.wikipedia.org/wiki/Pricing_strategieshttp://en.wikipedia.org/wiki/Profit_maximization

8/9/2019 Retail_QA

11/17

What is Pantry +oading?

When a product is 6ought in 6ul* and sold in diBerent phases

1ach phase cycle could 6e dependent on se5eral factors suchas the mar*et strategies

The supplier sells the product at a much reduced price than ise:pected

The promotional acti5ities related to the product are carried outin diBerent phases called as stage promotions

What is S "?

S "= Stoc* eeping "nit

The measure of the 7uantity or stoc* of a product is called asS "

What are /0COT1RMS?

The /0COT1RMS are the /nternational Commercial Terms

/nternational These are a series of pre;de9ned commercial terms pu6lished

6y the /nternational Cham6er of Commerce @/CCA

The /ncoterms rules are intended primarily to clearlycommunicate the tas*s8 costs8 and ris*s associated &ith thetransportation and deli5ery of goods.

1:= o5ernments8 legal authorities8 and practitioners &orld&ide

accept these rules for the interpretation of most commonlyused terms in international trade.

These are intended to reduce or remo5e altogetheruncertainties arising from diBerent interpretation of the rules indiBerent countries. s such they are regularly incorporated intosales contracts &orld&ide.

,,

http://en.wikipedia.org/wiki/International_Chamber_of_Commercehttp://en.wikipedia.org/wiki/International_Chamber_of_Commerce

8/9/2019 Retail_QA

12/17

What is 2O$?

2O$= 2ree On $oard@0amed port of ShipmentA

The seller pays for transportation of goods to the port ofshipment8 loading cost.

The 6uyer pays cost of marine freight transportation8 insurance8

unloading and transportation cost from the arri5al port todestination

The passing of ris* occurs &hen the goods are in 6uyeraccount. The 6uyer arranges for the 5essel and the shipper hasto load the goods and the named 5essel at the named port ofshipment &ith the dates stipulated in the contract of sale asinformed 6y the 6uyer .

What is C/2?

C/2= Cost8 /nsurance and 2reight

Seller must pay the costs and freight to 6ring the goods to theport of destination.

Ris* is transferred to the 6uyer once the goods are loaded on

the 5essel. /nsurance for the goods is included

What is C2R?

C2R= Cost and 2reight

,

8/9/2019 Retail_QA

13/17

Seller must pay the costs and freight to 6ring the goods to theport of destination.

This is similar to C/2 6ut the /nsurance is not included

Ris* is transferred to the 6uyer once the goods are loaded onthe 5essel. /nsurance for the goods is included

What is % 2?

% 2= %eli5ered at 2rontier

This term can 6e used &hen the goods are transported 6y railand road.

The seller pays for transportation to the named place ofdeli5ery at the frontier.

The 6uyer arranges for customs clearance and pays fortransportation from the frontier to his factory. The passing ofris* occurs at the frontier.

What is % P?

% P= %eli5ered t Place

"sed for any transport mode or &here there is more than onetransport mode in5ol5ed.

The seller is responsi6le for arranging carriage and fordeli5ering the goods8 ready for unloading from the arri5ingcon5eyance8 at the named place.

%uties are not paid 6y the seller under this term

What is 2C ?

2C = 2ree Carrier

,3

8/9/2019 Retail_QA

14/17

The seller deli5ers the goods8 cleared for e:port8 at a namedplace. This can 6e to a carrier nominated 6y the 6uyer8 or toanother person nominated 6y the 6uyer.

/f deli5ery occurs at the sellerDs premises8 the seller isresponsi6le for loading the goods on to the 6uyerDs carrier

/f deli5ery occurs at any other place8 the seller is deemed toha5e deli5ered the goods once their transport has arri5ed atthe named place the 6uyer is responsi6le for 6oth unloadingthe goods and loading them on to their o&n carrier.

What are Promotions?

Promotion is one of the mar*et mi: elements or features8 and a termused fre7uently in mar*eting .

The mar*eting mi: includes the four PDs= price8 product8 promotion8 andplace.

Promotion refers to raising customer a&areness of a product or 6rand8generating sales8 and creating 6rand loyalty.

Promotion is also found in the speci9cation of 95e promotional mi: orpromotional plan. These elements are personal selling8 ad5ertising8sales promotion8 direct mar*eting 8 and pu6licity.

promotional mi: speci9es ho& much attention to pay to each of the95e su6categories8 and ho& much money to 6udget for each.

promotional plan can ha5e a &ide range of o6Jecti5es8 including=sales increases8 ne& product acceptance8 creation of 6rande7uity 8 positioning 8 competiti5e retaliations8 or creation of a corporateimage . 2undamentally8 there are three 6asic o6Jecti5es of promotion.

These are=

,. To present information to consumers as &ell as others.

. To increase demand.

,4

http://en.wikipedia.org/wiki/Marketing_mixhttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Promotional_mixhttp://en.wikipedia.org/wiki/Direct_marketinghttp://en.wikipedia.org/wiki/Brand_equityhttp://en.wikipedia.org/wiki/Brand_equityhttp://en.wikipedia.org/wiki/Positioning_(marketing)http://en.wikipedia.org/wiki/Corporate_identityhttp://en.wikipedia.org/wiki/Corporate_identityhttp://en.wikipedia.org/wiki/Marketing_mixhttp://en.wikipedia.org/wiki/Marketinghttp://en.wikipedia.org/wiki/Promotional_mixhttp://en.wikipedia.org/wiki/Direct_marketinghttp://en.wikipedia.org/wiki/Brand_equityhttp://en.wikipedia.org/wiki/Brand_equityhttp://en.wikipedia.org/wiki/Positioning_(marketing)http://en.wikipedia.org/wiki/Corporate_identityhttp://en.wikipedia.org/wiki/Corporate_identity

8/9/2019 Retail_QA

15/17

3. To diBerentiate a product.

Many times &ith the purchase of a product there is an incenti5e li*ediscounts @i.e.8 couponsA8 free items8 or a contest. This method is used to

increase the sales of a gi5en product.

What are %iscounts and allo&ances?

%iscounts and allo&ances are reductions to a 6asic price ofgoods or ser5ices

%iscounting is a form of Promotion

%iscounting purpose is to increase short;term sales8 to mo5eout;of;date stoc*8 to re&ard 5alua6le customers8 toencourage distri6ution channel mem6ers to perform a function8or to other&ise re&ard 6eha5iors that 6ene9t the discountissuer.

What is 2orecasting?

2orecasting is the process of ma*ing statements a6out e5ents &hoseactual outcomes ha5e not yet 6een o6ser5ed.

1:= 1stimation of some 5aria6le of interest at some speci9ed futuredate. Prediction is a similar8 6ut more general term. $oth might refer toformal statistical methods employing time series 8 cross;sectional or longitudinal data8 or alternati5ely to less formal Judgmentalmethods.

"sage can diBer 6et&een areas of application

1:= /n hydrology 8 the terms

8/9/2019 Retail_QA

16/17

Ris* and uncertainty are central to forecasting and prediction

enerally considered good practice to indicate the degree ofuncertainty attaching to forecasts.

The data must 6e up to date in order for the forecast to 6e as accurateas possi6le.

What is Price 1lasticity? 1lasticity is a measure of customer sensiti5ity to changes in

price.

The measure of elasticity comes from modeling the historicalsales data for a product at diBerent price points.

%emand responses to price changes @6ase and promotionA areanaly(ed for e5ery product in e5ery store o5er time andsophisticated techni7ues8 such as multi;le5el aggregation andmulti5ariate $ayesian regression8 are used to interpolatee:pected demand at all price le5els

What is Competitor Pricing? price lo&er than that oBered 6y the competitors 8 or a pricemade more attracti5e 6ecause of added incenti5es 8 such aslonger payment terms .

Competiti5e Pricing occurs &hen a company sets a price for aproduct 6ased on &hat its competitors are selling for similarproduct.

What is Margin nalysis? margin target can 6e speci9ed for a category or su6category.

This module responds to cost changes 6y 9nding the 6est itemsfor price changes and then ma*ing recommendations that hitthe speci9ed target &ith ma:imum pro9t

,!

http://en.wikipedia.org/wiki/Riskhttp://en.wikipedia.org/wiki/Uncertaintyhttp://media.lcpoblue.vega.revionics.com/Help/5.6.3/Content/Configuration/demand_modeling.htmhttp://www.businessdictionary.com/definition/labor-rate-price-variance.htmlhttp://www.businessdictionary.com/definition/competitor.htmlhttp://www.businessdictionary.com/definition/incentive.htmlhttp://www.businessdictionary.com/definition/payment-terms.htmlhttp://en.wikipedia.org/wiki/Riskhttp://en.wikipedia.org/wiki/Uncertaintyhttp://media.lcpoblue.vega.revionics.com/Help/5.6.3/Content/Configuration/demand_modeling.htmhttp://www.businessdictionary.com/definition/labor-rate-price-variance.htmlhttp://www.businessdictionary.com/definition/competitor.htmlhttp://www.businessdictionary.com/definition/incentive.htmlhttp://www.businessdictionary.com/definition/payment-terms.html

8/9/2019 Retail_QA

17/17

The contri6ution margin analysis is also applica6le &hen the ta:authority performs ta: in5estigations8 6y identifying targetinter5ie&ees &ho ha5e unusually high contri6ution marginratios compared to other companies in the same industry

What is Price Per "nit? 1nforces relational pricing on a per;unit 6asis so that large

pac*age si(es are appropriately priced relati5e to smallpac*age si(es.

/ncludes the a6ility to con9gure up;purchase incenti5es to dri5elarger 6as*ets or to impro5e pro9ta6ility

,#