Top flop division - forecasting methods, Corporate Finance

Assignment Help:

Top-flop division is based on the idea that the demand percentages of the 'top' and the 'flop' SKUs in a group of SKUs are fairly stable over time. For example, the 33% best-selling SKUs in a product group of t-shirts represent about 70% of total t-shirt demand, while the 33% worst-selling t-shirts only represent 5% (and the remaining 33% of SKUs represent 25%). Note that the number of top-to-flop categories is 3 in this example, but can be any number in general.

We remark that this bears similarities with the classiflcation of SKUs in ABC systems, which are common in practice. The idea has also been suggested by experts from the case study company. This method is included because it is new and intuitively attractive.

So, the historical SKUs in H are divided into a set C equally sized categories, ranging from top (highest total demand) to flop (lowest total demand). These categories are numbered 1, ... ,C and the corresponding subsets of H are denoted by H1; ... ;HC.If H/C is integer, then each category contains H/C SKUs. Otherwise, categories1, ... ,H bH/CcC contain dH/Ce SKUs and the remaining categories contain bH/Cc SKUs. Here, bxc denotes x rounded down to the nearest integer and dxe denotes x rounded up to the nearest integer. Let Hc, c =1, ... ,C, denote the number of SKUs in Hc .


Related Discussions:- Top flop division - forecasting methods

Do mergers result in layoffs?, Do mergers result in layoffs? A: Overall...

Do mergers result in layoffs? A: Overall employment in the banking industry actually has increased slightly over the last ten years. Some mergers do result in layoffs. However,

Review the existing legislation regulating banks entities, The Minister of ...

The Minister of Finance decides to review the existing legislation regulating banks and non-banking entities. You have been appointed as Advisor to the Minister to work on the pro

Dividend policy, the managing directors of three profitable listed companie...

the managing directors of three profitable listed companies discussed their company''s dividend policies. company A has deliberately paid no dividends for the past five years. comp

Analyse, Hi There; I’m looking for people who can complete three assignment...

Hi There; I’m looking for people who can complete three assignments for me. I’m looking for someone who can analyse three different empirical studies regarding stock or financial m

Describe statistical control- product and services, This subject has a majo...

This subject has a major individual assignment consisting of a number of tasks (parts). The assignment has been designed with the aim of providing you a practical application case

Bond valuation, An investor buys a French government, 10-year bond, paying ...

An investor buys a French government, 10-year bond, paying annual coupon of 4.5%. Face value = 1000. The investor is unsure of his investment horizon and considers 5 horizons: 5, 6

Illustrate the essential requisites of a promissory note, A promissory note...

A promissory note is an instrument in writing (not being a blank or a currency note) containing an unconditional undertaking, signed by the maker, to pay a certain sum of money onl

Prepare a statement of stockholders equity, On December 31, 2009, the Real ...

On December 31, 2009, the Real Weapons Factory reported total stockholders' equity of $447,200. On that date, total contributed capital was $360,000. During 2009, the firm had tota

Fin, Archer Daniels Midland Company is considering buying a new farm that i...

Archer Daniels Midland Company is considering buying a new farm that it plans to operate for 10 years. The farm will require an initial investment of $12.10 million.

Portfolio duration, how to calculate duration of a portfolio by using the a...

how to calculate duration of a portfolio by using the average maturity, average coupon rate and average yield of maturity?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd