Developing the Appropriate Assortment Plan and Inventory Level to Maximize Sales and Profit
Assortment planning is a process whereby products are selected and planned to maximize sales and profit for a specified period of time. The assortment plan considers the financial objectives and seasonality of merchandise to ensure proper receipt flow. Outputs of assortment planning include initial purchase quantities and the receipt flow across time that will inform the allocation process. The level of detail in the assortment planning process will differ depending on the type of product being planned. For the purpose of this discussion, products are categorized into one of two product types: fashion or basic.
The purpose of assortment planning is different for fashion product versus basic product. Fashion product follows the concept of assortment planning, with the objective of developing a product mix, whereas basic product utilizes the process of category management, with the goal of determining inventory levels.