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17 Cards in this Set
- Front
- Back
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Value of inventory that should be on hand as shown by the accounting records
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Book Inventory
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Value of inventory that is determined by subtracting estimated shortage from book inventory
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Estimated Physical Inventory
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The amount of shortage that probably has occurred on the basis of past experience
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Estimated Shortage
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A measure of inventory profitability that relates a store's gross margin to the cost of the inventory needed to generate the profit
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Gross Margin Return on inventory (GMORI)
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Difference between book inventory and physical inventory when book inventory is smaller
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Overage
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A system of accounting whereby all transactions affecting the value of the inventory are posted to the records on a frequent basis (perhaps daily), providing a book inventory value
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Perpetual Inventory System
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Value of inventory determined by actually counting the merchandise
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Physical Inventory
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A procedure whereby the approximate cost value of the ending inventory and, consequently, the cost value of merchandise sold, is determined from the retail value of the closing inventory
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Retail Method of Inventory (RIM)
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Merchandise returned to the vendor, usually requiring the vendor's permission
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Return to Vendor (RTV)
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Difference between physical inventory and book inventory when book inventory is larger
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Shortage (or Shrinkage)
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Sum of the stock at the beginning of period, the stock at the beginning of similar periods, and the stock at the end of the period, divided by the total number of stock listings
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Average Stock
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The assortment of merchandise that should be maintained at all times. This merchandise consists of staples that have a highly predictable sales because customer demand remains relatively consistent
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Basic Stock
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A projection of the sales goals of a department, a classification, or an entire store for each month of a six-month period. This type of plan indicates the rate at which money should be used for purchases in order to maintain the desired balance between stock and sales
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Dollar or Seasonal Merchandise Plan/
Six Month Plan |
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The balance of the amount of merchandise that a buyer may order during a giver period, usually one month. Open-to-buy may be calculated in dollars or units of merchandise
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Planned Purchases
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The ratio that exists between the stock on hand at the beginning of the month (or, sometimes, the end of the month) and the retail sales projected for that same month. This is one method used to determine the proper amount of stock to be kept in inventory
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Stock-Sales Ratio
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The number of times during a given period that the average inventory on hand is sold and replaced. This ratio is commonly calculated for one year or a six-month season.
Net Sales/Average Inventory at Retail |
Stock or Inventory Turnover/
Stock Turn |
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A method of planning stock whereby the needed inventory is equal to the sales for a specific number of weeks
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Week's Supply
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