Assortment Analysis Parameters

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Performance Criterion

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This drop-down list lets you choose the criterion you wish to apply to rank the products:

Markup

This choice will sort the products by their markup value based on the quantity sold.

 

Markup (Retail price (tax excl.) - Wholesale price)

×

Quantity sold

=

Markup

Note: requires Assortment File, Price List File and Sales Figures File

None

This choice lets you create a sub-assortment of your database based on your Assortment File but without any analysis. The products are listed alphabetically by reference in the Assortment Analysis Log.

Note: requires Assortment File

Tip: To work on a subset your database in the product catalog, use this method combined with Rank and Filter the Product Catalog.

Quantity sold

This choice will sort the products by quantity of items sold, not taking into account the monetary value of each item. The product with the highest number of units sold will be ranked first and the lowest number of units sold will be ranked last.

Note: requires Assortment File and Sales Figures File

Retail value (tax excl.)

This will sort the products by the amount of money generated from sales before tax. The product with the highest sales revenue will be ranked first and the one with the lowest sales revenue will be last.

 

Retail price (tax excl.)

×

Quantity sold

=

Retail value (tax excl.)

Note: requires Assortment File, Price List File and Sales Figures File

Retail value (tax incl.)

This will sort the products by the amount of money generated from sales including tax. The product with the highest sales revenue will be ranked first and the one with the lowest sales revenue will be last.

 

Retail price (tax incl.)

×

Quantity sold

=

Retail value (tax incl.)

Note: requires Assortment File, Price List File and Sales Figures File

Inclusion threshold

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This parameter lets you specify a percentage threshold defining which products are valuable enough to keep.

This type of analysis uses what is known as the Pareto principle to identify the vital few versus the trivial many products. Applied to sales, this principle states that the vast majority of your results are generated by a small percentage of products.

The inclusion threshold represents the cumulated percentage values you want to reach to decide which products are parts of the vital few. A ratio of 80/20 (80% inclusion threshold) is often used but you can enter any desired target value.

Ex: with an 80% inclusion threshold and Retail value (tax excl.) as performance criterion, the analysis works as follows:

  1. The products listed in your Assortment File are analyzed.
  2. They are ranked according to their individual Retail value (tax excl.).
  3. Starting with the highest ranking product, the individual product Retail value (tax excl.) are added until their sum reaches the 80% inclusion threshold. These products are judged above threshold by the analysis (the vital few).
  4. The remaining products which cumulated Retail value (tax excl.) make up 20% or less of the total are judged below threshold by the analysis (the trivial many).

Here is an analysis result log for the above example with 11 products. In this example, 4 products (in green) are enough to reach at least 80% of the revenue. The remaining 7 products (in red) amount to less than 20% of the revenue

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Below is a typical Pareto graph illustrating the same example :

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Restrict to Catalog Filters

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Tip: Use this method to analyze sales for any category, brand or other Item Classification Properties you have defined. For example, select any category in the product catalog and see right away how products rank just within this category.

In this case the assortment analysis results will be the same no matter what classification level is selected in the Product catalog.




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