Data Warehousing: Using the Wal-Mart Model
A real-world look at how Wal-Mart developed and uses its massive data warehouse.
TABLE OF CONTENTS Data Warehousing: Using the Wal-Mart Model
Appendix A: Retail Formulas
Here are some commonly used formulas that can be used during the business exploration. I obtained these formulas from various people in the retail industry. Every retailer will use formulas similar to these. Sometimes a retail company will use the same name for a different formula. It is for this reason that these formulas should be documented and distributed so that everyone in the business can use a "common language" when referring to a calculated value.
Inventory Formulas
Net Receipts
- (Purchases + Transfers in + Returns from customers + Overages)
- - (Transfers out + Returns to vendors)
- = Net receipts
Ending Inventory at Retail
Beginning inventory
- - Sales
- - Transfers out
- - Returns to vendor
- - Markdowns
- - Employee discounts
- - Shrinkage
- + Purchases
- + Returns from customers
- + Transfers in
- + Markups
- = Ending inventory
Average Inventory
- For six months: BOM inventory added for past 7 months / 7
- For a year: BOM inventory added for past 13 months / 13
- Note: BOM = Beginning of month
Turnover
- Season = $ Total sales for season/$ Average inventory for season
- Year = $ Total sales for year/$ Average inventory for year
Stock-to-Sales Ratio
$ Retail beginning inventory / $ Sales
Fresh Goods Factor
$ Receipts of the past two months / $ BOM inventory for current month
Open to Buy
| For current month: | Planned BOM inventory for next month |
| + Planned sales for current month | |
| + Planned markdowns for current month | |
| + Planned shrinkage for current... |
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