Learning Goal: Analyse product performance using sell‑through rate, turnover, and weeks of supply.

Complete Lesson Content:
Sell‑through % = Units Sold / (Beginning Inventory + Received) × 100. It measures product popularity. A high sell‑through (>80% over a season) is excellent; low sell‑through (<30% early) signals trouble. Inventory turnover = Cost of Goods Sold / Average Inventory (at cost). It indicates how efficiently you’re managing inventory. High turnover means you’re selling fast and replenishing often. Weeks of Supply = Current Inventory / Average Weekly Sales – tells you how long your stock will last.
Step‑by‑step Explanation:

  1. For a skirt: received 200 units, sold 150. Sell‑through = 75%.
  2. If your COGS for the quarter is $100,000 and average inventory at cost is $25,000, turnover = 4.
  3. If you have 50 units on hand and weekly sales average 10, weeks of supply = 5.
    Best Practices: Use sell‑through by week to spot trends; don’t wait until end of season.
    Common Mistakes: Calculating sell‑through without accounting for returns.
    Real Industry Example: A sportswear retailer reviews weekly sell‑through; any style <20% after 4 weeks gets marked down.
    Mini Case Study: A buyer saw a jacket had sell‑through of 90% in 2 weeks. She immediately reordered, but the reorder arrived after the trend faded, causing overstock. Now she considers lead time before reordering.
    Practical Activity: Given data on 3 items, calculate sell‑through, turnover, and weeks of supply.
    Assignment: Analyse a provided sales dataset and recommend which 3 items should be marked down, which to reorder, and why.
    Lesson Summary: These metrics give you visibility into what’s working and what’s not, enabling swift action.
    Key Takeaways:
  • Sell‑through = consumer acceptance.
  • Turnover = inventory efficiency.
  • Weeks of supply = runway.
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