Planning sales in a non manufacturing firm
There are many inventory items and departments so it is very difficult to make a good sales plan
There are many factors to considers such as discounts, stock shortages, gross margins etc.
Two approaches used to plan sales
Unit-price approach. First the units to be sold and the units sales price for each product and plan. This is identical with the approach discussed earlier in this chapter for manufacturing enterprises. This method is practical when (1) the numbers of product lines is……., and (b) the selling price is relatively……….. (e.g. automobile dealer)
Small-dollar approach. This approach plans sales in dollars only for each sales department. Sales departments often are organized in retail enterprises by product lines (e.g. women’s clothes, men’s clothes, sporting goods, shoes). This method is used when (a) the number of product lines is……, and (b) the selling prices across product lines vary significantly. It’s not good to use unit price to plan sales for grocery store.