| Summary: | 碩士 === 國立臺灣師範大學 === 高階經理人企業管理碩士在職專班(EMBA) === 104 === The retail inventory method is used by many high-volume retailers that have many different types of merchandise. According to the International Financial Reporting Standards and intermediate accounting theory, the retail inventory method is based on relationship between the cost of merchandise and its retail price. The company calculates the cost-to-retail ratio to estimate the ending inventory and cost of goods sold. However, the theory failed to explore whether gross profit is affected by the purchasing behavior of a retailer using retail inventory method. The objective of this study is to examine the impact of purchasing behavior of stores on gross profits using a chain drug store as a case study.
According to the simulation results, this study finds that (1) when a promotion is within one month and the store purchases high profit margin products in the promotion month, the gross profit rate in the promotion month increases. However, when a promotion is within one month and the store purchases high profit margin products one month before the promotion month, the gross profit rate increases in purchasing month and then decrease in the promotion month. (2) When a promotion is within two months and the store purchases products evenly within two months, the gross profit rate is the same in these two months. (3) When a promotion is within two months and the store purchases more products in the first month than in the second month, the gross profit rate is higher in the first month than that in the second month. In contrast, if the store purchases more products in the second month than in the first month, the gross profit rate in the first month lower than that in the second month. (4) Compared to the gross profit rate of stores which purchase high-margin products at the promotion period and then purchase low-margin products afterwards, the gross profit rate is higher for stores which purchase high-margin products and then continually purchase high-margin merchandise. Therefore, the results of this study show that gross profits are influenced by the timing of purchases and the gross margin of goods the store purchase.
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