# Calculating Sell-Thru and Penetration

This week’s case study will review the Pricing Strategy concepts you learned and practiced last week.
Calculating sell-thru allows businesses and managers to determine the percentage of units sold compared to the
total amount originally on hand. Calculating penetration of product styles, product types, vendors, etc., allows
managers to identify and reorder best sellers, and to take action to address slow-selling, less-profitable products.

What ultimately influences results are the actions that businesses take based on analysis of the information
gathered from the data and the thought processes used to make decisions.

Instructions
Use the information below to answer the questions that follow:

The buyer ordered 1,200 units of sweaters and planned for a 35% sell-thru in the first month
All 1,200 units were received in the stores 4 weeks ago
The current inventory report shows 400 units of the sweater on-hand
Of the 1,200 units, the sell-thru on cardigans was the highest, and the stores in colder climates sold more
sweaters during the first four weeks
The buyer purchased the sweaters from several different vendors; total sales in the sweater category for the
month were \$48,000
Vendor A – \$19,650
Vendor B – \$18,900
Vendor C – \$9,450

1. Calculate the sell-thru of the sweater and show your work
2. Calculate the penetration rate for each of the vendors
3. Analyze the above scenario to explain the following:
How does the sell-thru compare to the buyer’s plan?
What can the sell-thru data tell the buyer?
What can the penetration rate tell the buyer?
Why is it important to know which stores are trending up/down in sales?
How should the buyer respond to the sell-thru and penetration data?
What other information would the buyer want to know in order to make wise business decisions in
responding to this sales report?

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