Improving the Profitability of Retail Merchandising Decisions

Abstract

Department stores in the United States have recently experienced a decline in corporate financial performance, particularly in the profitability of merchandising operations. The use of a refined version of the return-on-investment measure is suggested as a means of improving the financial performance of retail merchandising decisions. Results of a simulated experiment are reported indicating the positive effects on merchandising profitability of using the suggested return-on-investment decision criterion.