Markdowns at Walmart

Markdowns at Walmart

Pertinent Information and Sales Results at Full Price After 1 Month of Sales
SKU#	Cost	Retail	Margin Percentage	Initial Unit Buy	Initial Buy at Cost	Initial Buy at Retail	Unit Sales at Full Price	Dollar Sales at Full Price	Sell-thru %
55559323	$        15.95	$                  41.00	61.10%	1,000	$15,950	$41,000	750	$30,750	75.00%
56521280	$        29.33	$                  88.00	66.67%	1,200	$35,196	$105,600	360	$31,680	30.00%
55332904	$        25.34	$                  90.00	71.84%	1,200	$30,408	$108,000	502	$45,180	41.83%
57277647	$        23.55	$                  71.00	66.83%	500	$11,775	$35,500	343	$24,353	68.60%
55709667	$        16.93	$                  57.00	70.30%	750	$12,698	$42,750	482	$27,474	64.27%
55435535	$        12.69	$                  48.00	73.56%	750	$9,518	$36,000	315	$15,120	42.00%
		Overall Margin %  =	68.38%					Overall Sell Thru % =	53.62%
			478.69%						375.32%
b) Assume the buyer wanted to achieve at least a 64% margin for the six products. Was this goal achieved? Explain why or why not and how margin percentages may have affected inventory performance. (3 points)
Question b:	This goal would be achieved assuming the buyer wanted to achieve an average margin percentage of 64%. Notably, this is so because the overall average margin was 68.38%. The target was achieved because most products surpassed the target. Only the product failed to attain this target. The margin percentages may have affected inventory performance negatively because when they are higher than expected, it means there are lower inventory levels.
c) Assume the buyer wanted to achieve an average sell-thru percentage of 64% at full price for the six products. Was this goal achieved? Explain why or why not. (3 points)
Question c:	The buyer did not achieve a 64% average sell-thru percentage. Notably, this is because the achieved average sell-thru percentage was 53.62%. The failure to achieve this goal can be directly associated with the three products with sell-thru values of 30%, 41.83%, and 42%.
d) Based on the results of your calculations and the other information in the Spreadsheet, identify which products you would mark down and explain how the markdowns would be expected to affect inventory costs, total dollar sales, and sell-thru percentages. (4 points)
Question d:	I would select the second product for markdown. This is because the product has the highest cost but the worst performance in sell-thru and dollar sales. In that pecking order, the third product will be marked down for having similar features to the second product. A markdown on the two products will more likely increase their sales and thus reduce their inventory amounts.

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Download the following Spreadsheet: Example Spreadsheet.

Based on research, course content, and the spreadsheet data for inventory and sales performance on selected products in a Walmart store, complete the following:

1. Calculate the answers for the blank (highlighted) cells in the Spreadsheet.
2. Assume the buyer wanted an average margin percentage of at least 64% for the six products. Was this goal achieved? Explain why or why not and how margin percentages may have affected inventory performance.
3. Assume the buyer wanted to achieve an average sell-thru percentage of 64% at full price for the six products. Was this goal achieved? Explain why or why not.
4. Based on the results of your calculations and the other information in the Spreadsheet, identify which products you would mark down and explain how the markdowns would be expected to affect inventory costs, total dollar sales, and sell-thru percentages.