Case Study

Purchase Management

Increase in sales by 21%

Challenge

A garment retail company carried out purchases for their stores twice a year to keep up with new trends. The sales heads would tour to purchase, apart from buying the right products, they would end up buying based on credit available with the vendors, cash they have in hand and their personal choice which would then result in an ever increasing dead stock.

Solution

Trend analysis was carried out for each of their product segments to understand the sales pattern. Segments were divided to identify High Profit – High Demand, and Low Profit – High Demand products. Mathematical model was created keeping in mind recent  trends to arrive at minimum stocking level and maximum quantity to purchase for each segment. Purchase plan was developed in accordance with the model.

Benefits

  1. Reduced portfolio of products earned market reputation in specific segments increasing sales by 21%
  2. New entry to dead-stock dropped by 93%
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