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Control
- Measuring actual performance against goals or standards, and reacting to the causes of any deviations from those goals
- Tells retailers how they're doing
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Control standard
- A reference point or benchmark to measure performance
- Ex: $2.0 million sales goal for August
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Penetration
A measure of the performance of a single business unit as a percentage of the aggregate performance of all similar business units
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Internal standards
Derived from data within an organization
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Industry standards
Derived outside an organization, often by a trade association (NRF)
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Deviations
- Discrepancies between actual performance and a standard
- % dev = (TY - LY)/(LY)
- Positive deviation is good, negative is bad
- Deviation from planned sales is good, from expenses is bad
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Qualitative controls
- Measure performance descriptively
- Subjective
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Quantitative controls
- Measure performance numerically
- Objective
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Control intervals
- Controls are established at specific time intervals
- Hourly, daily, weekly, monthly, quarterly, seasonally, or annually
- Frequency is based on the likelihood of deviations from standards
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Control levels
- Controls are established at the same organizational levels as plans
- Category, department, division, store, district, and regional
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Report
A compilation of timely information synthesized into a meaningful form
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Exception reports
- Include only major deviations from standards, bypasssing minor ones
- Only include +/- 10 percent deviations
- Reduces the size of the report and the amount of time needed to review it
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Turnover report
- Includes TY and LY sales, average inventory by store and chain, and the percentage change to LY for each.=
- Turnover for TY and LY is calculated by store and chain
- Sales and turnover performance can be assessed by comparing a store's performance to the chain's
- Turnover issues can be traced to sales and/or average inventory
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