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l Defective or dirty merchandise that can-
not be returned to the vendor
l Increase in customer interest and volume
with specials
The above reasons set up some guidelines but
do not really answer the questions when and
how much. There are no simple answer. For
excess or dead stock, a general rule you can follow
is to mark an item down whenever it will not sell
at its present price. Mark it down to a level that
will stimulate sales. Mark down seasonal items
just before the end of the season, not after the
season is over. Trial and error is probably your
best method of learning. You should not be afraid
to experiment occasionally.
One procedure you should avoid is marking
down items progressively, such as 5 percent each
week. Your customers will soon discover they can
just wait around until the price has reached
bottom. When you have decided an item is to be
marked down, go ahead and cut the price suffi-
ciently so you can sell the item. Whether the
markdown is 5 percent or 50 percent, establish
it and stick to it.
Another price change is the markdown to
zero. Some ships store stock items that do
not require a survey can be marked down to zero
and charged to ships store profits. You can use
a markdown to zero to expend ships store stock
items under the following circumstances.
. Stock items that are damaged or broken
and have no resale value. The total cost value per
line item cannot exceed $25.
. Items of stock that have deteriorated
beyond salability as a result of overage. The total
cost value should not exceed $25 per line item.
. Items of stock that are shopworn and have
no resale value. The total cost value should not
exceed $25 per line item.
. Food or beverage items of stock that are
considered to be unfit for human consumption,
as certified by the medical department.
. Concealed losses or damages. The total
cost value should not exceed $25 per line item.
Under the circumstances listed above, the
items should be marked down to zero and then
expended as a cost to ships store profits
according to the procedures outlined in your
NAVSUP P-487. You must use a Retail Price
Change (NAVSUP 983) that has the following
certification signed by the senior Supply Corps
officer on board. (This authority cannot be
delegated.)
I personally have seen the merchandise
hereon marked down to zero and have
ordered it destroyed.
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Senior Supply Officer On Board
Price Adjustments for
Standard Navy Clothing
The sale of Navy clothing in a ships store
afloat is handled as a service to the crew. No profit
or loss is to be derived from it. Prices for Navy
clothing are standard throughout the Navy.
Clothing is received from supply activities and
sold at the standard price. However, situations
will develop that will make it necessary for you
to revalue certain clothing items in order to avoid
absorbing profit or loss.
The most common of these situations is the
-.
standard price adjustment. Annually, on
October 1, and occasionally at other times.
standard prices for Navy clothing are issued to
all ships. They are based on existing cost prices
to the Navy, and may, of course, vary from year
to year. When a change in price occurs for any
item stocked, you must revalue the number of
items you have in stock (as determined by inven-
tory) to the new standard price.
The other type of price adjustment for stand-
ard Navy clothing is a purchase variance. A
purchase variance occurs when standard Navy
clothing items are received from a commercial
vendor. A purchase variance equals (1) the dif-
ference that results when the unit cost price of an
item of standard Navy clothing is rounded off to
the nearest cent, or (2) the difference that exists
between the standard price and cost price of a
standard Navy clothing item.
To account for ail gains and losses resulting
from standard price changes and purchase
variances, you must make certain that a separate
original and one copy of the NAVSUP 983 are
prepared. (Consult the current NAVSUP P-487
for detailed procedures for preparing the NAV-
SUP 983.) All gains and losses must be credited
or debited to the Navy Stock Fund. The original
NAVSUP 983 should be filed in the Fiscal Gains
or Losses File (SSA-15), and the copy should be
filed in the Accountability File (SSA-21).
The new unit cost of an item that results from
a change in the standard price should be recorded
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