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

Solve it please, Question 1 If the economy booms, RTF, Inc. stock is expec...

Question 1 If the economy booms, RTF, Inc. stock is expected to return 10%. If the economy goes into a recessionary period, then RTF is expected to only return 4%. The probability

Advantages and disadvantages of overdraft, A factoring company has offered ...

A factoring company has offered a one-year agreement with Glub Ltd to both manage its debtors and advanced 80 per cent of the value of all its invoices immediately a sale is invoi

Calculate the holding period return or yield, 1. Calculate the HPY on a bon...

1. Calculate the HPY on a bond that is currently selling for 103-25 (priced as % of 100% par, in 32nds), has 8 years left to maturity, carries a 7% coupon (paid semiannually), coup

Balance scorecard, hey i need help creating a balance scorecard how long wi...

hey i need help creating a balance scorecard how long will that take >>?

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

WACC, The cost of capital for a firm can differ from the cost of capital fo...

The cost of capital for a firm can differ from the cost of capital for each of its businesses. When a firm has multiple businesses, it is important to use the cost of capital appro

Need help with determining IRR, Continue with the Strategy of choice - Cal...

Continue with the Strategy of choice - Calculate the Net Present Value (NPV) - Determine the Internal Rate of Return (IRR) - Set Electrolux’s Required Rate of Return (RRR) E

Describe the term value management, Problem: (a) Describe the term "Va...

Problem: (a) Describe the term "Value Management" and what are the related benefits in applying such principles in a project?  In your opinion, how will Value Management

Ssjdda, As the company''''s sales and earnings increased, so did the demand...

As the company''''s sales and earnings increased, so did the demand for capital. The firm''''s needs included inventory as well as additional space to house the inventory, computer

Calculate the pv and npv, Suppose you take out a loan of $10,000, repayable...

Suppose you take out a loan of $10,000, repayable by five equal annual instalments. The interest rate is 10% per year. (a) How much do you need to repay per year to the nearest ce

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