FM225 Final - Ch 15

  1. Control
    • Measuring actual performance against goals or standards, and reacting to the causes of any deviations from those goals
    • Tells retailers how they're doing
  2. Control standard
    • A reference point or benchmark to measure performance
    • Ex: $2.0 million sales goal for August
  3. Penetration
    A measure of the performance of a single business unit as a percentage of the aggregate performance of all similar business units
  4. Internal standards
    Derived from data within an organization
  5. Industry standards
    Derived outside an organization, often by a trade association (NRF)
  6. Deviations
    • Discrepancies between actual performance and a standard
    • % dev = (TY - LY)/(LY)
    • Positive deviation is good, negative is bad
    • Deviation from planned sales is good, from expenses is bad
  7. Qualitative controls
    • Measure performance descriptively
    • Subjective
  8. Quantitative controls
    • Measure performance numerically
    • Objective
  9. Control intervals
    • Controls are established at specific time intervals
    • Hourly, daily, weekly, monthly, quarterly, seasonally, or annually
    • Frequency is based on the likelihood of deviations from standards
  10. Control levels
    • Controls are established at the same organizational levels as plans
    • Category, department, division, store, district, and regional
  11. Report
    A compilation of timely information synthesized into a meaningful form
  12. Exception reports
    • Include only major deviations from standards, bypasssing minor ones
    • Only include +/- 10 percent deviations
    • Reduces the size of the report and the amount of time needed to review it
  13. Turnover report
    • Includes TY and LY sales, average inventory by store and chain, and the percentage change to LY for each.=
    • Turnover for TY and LY is calculated by store and chain
    • Sales and turnover performance can be assessed by comparing a store's performance to the chain's
    • Turnover issues can be traced to sales and/or average inventory
Card Set
FM225 Final - Ch 15
FM225 Final