This page is for a domestic buyer or planner closing out a season who must judge what the stock still on the shelf actually says. At work, a person can treat unsold stock at season end only as a clearance problem to mark down and forget, without asking what it reveals about how the original buy was set. This lesson mainly teaches the information flow: it works out, using Cedar & Co.'s own illustrative domestic figures, exactly how much a season's own leftover stock says the original buy overshot actual demand.
Cedar & Co. buys 6,000 pieces of a domestic T-shirt style from Delta Garments, on its own forecast, for its own 12 shops. When the season closes, 750 pieces remain unsold. Read on its own, that number only says stock is left; read against the target and the actual demand the season revealed, it says how much the next buy should change. Without this skill, a buyer repeats the same overbuy every season, discovering it only after the stock has already piled up.
You need: lesson T20-C04-L01, which shows how to calculate a sell-through rate and compare it against a target.
By the end of this lesson you can:
Not covered here: how to recover value from stock, or the raw material behind it, once it will not sell as first planned, covered in the next lesson of this course (lesson T20-C04-L04).
| Term | Meaning |
|---|---|
| Sell-through rate | The share of stock actually sold within a planned period, used to judge whether a forecast was right. |
| Forecast | A company's own estimate of what it expects to sell, used to decide how much to produce before any specific sale exists. |
| Stock cover | The number of weeks a brand's current stock is expected to last before it runs out, given its normal sales rate. |
| Margin | Profit divided by the selling price, shown as a percentage of what a company sells for. |
| Shop price | The price the customer pays at the till. Also called the retail price. |
Stock still unsold at the end of a planned selling season is a different measurement from a mid-season sell-through check: it is the season's own final verdict, not a projection. Measured as a rate, units still unsold divided by units originally bought, it can be compared directly against a target rate a buyer sets for how much leftover stock a normal season should carry. A rate above that target does not just mean stock needs clearing; it means the buy itself was set higher than actual demand supported, and the next buy for that style should be corrected down.
A buyer meets several shapes of this measurement across a normal working year, and each depends on how the style was bought and replenished.
| What can differ | The shapes you will meet | Why it matters |
|---|---|---|
| Domestic Make to Stock style bought against a standing forecast | Cedar & Co. buys its own T-shirt style once against a forecast, and whatever remains when the season closes is the full end-of-season stock. | A single forecast-based buy carries the whole risk of an inaccurate forecast, with no later shipment to correct it before season end. |
| Export hybrid order with pre-booked and replenishment volume | An export buyer such as Fairway Stores can trim an order's own replenishment portion mid-season, so end-of-season stock reflects a partly corrected buy, not the original forecast alone. | A hybrid order's end-of-season stock rate is a weaker signal of the original forecast's own accuracy, since part of the buy was already adjusted. |
| A style restocked continuously from a rolling standing forecast | A core style with its own continuous replenishment cycle has no single season end at all, so end-of-season stock does not apply to it in the same way. | Not every style closes a season; a continuously restocked style is judged on its own stock cover, not an end-of-season rate. |
| A style deliberately overbought to guarantee availability for a key account | A buyer may accept a higher end-of-season stock rate on purpose for a style it cannot risk running out of for an important customer. | A high end-of-season stock rate is not automatically a mistake; it can be a deliberate trade-off the buyer should record as such, not confuse with a genuine forecast error. |
Cedar & Co. buys 6,000 pieces of a domestic T-shirt style from Delta Garments on its own forecast, at a cost of USD 6.50 a piece, selling at a shop price of USD 14.90. Cedar & Co.'s own target is no more than 5% of units bought left unsold at season end. When the season closes, 5,250 pieces have sold and 750 remain.
Cedar & Co.'s own 12.5% end-of-season stock rate is more than double its own 5% target, and the corrected buy calculation shows the original order overshot actual demand by about 474 pieces. That gap, not the raw 750 pieces left over, is the number that should adjust the next season's own buy for this style.
The methodA common mistake is marking down the stock left at season end and moving on, without asking what the leftover quantity says about the accuracy of the original buy. What this costs a buyer who gets it wrong is a repeated overbuy: the same style, or a similar one, is bought at the same inflated quantity next season, and the same share ends up unsold again, season after season, because the forecast error was never actually corrected. A related mistake is treating every high end-of-season stock rate as a forecast failure, without checking whether it was a deliberate trade-off to guarantee availability.
Stock still unsold when a season closes is the season's own final verdict on the original buy, not just something left to clear. Measured as a rate against the total units bought and compared against a target, it shows how far the buy overshot the demand the season actually revealed. The corrected buy quantity for next time is calculated from the actual demand, not the original forecast, and the gap between the two is what should change. Treating leftover stock only as a clearance problem, without feeding that gap back into the next buy, repeats the same overbuy every season.
At season end, Cedar & Co.'s planner brings Omar the closing report on the domestic T-shirt style. A junior colleague has already suggested simply marking down the 750 remaining pieces and repeating the same 6,000-piece buy next season, since the style still sold reasonably well overall.
Here is the closing report line the planner actually brought to Omar:
Should Cedar & Co. reduce next season's buy for this style, and if so, to what quantity? Decide before opening the answer.
Yes, reduce the buy to about 5,526 pieces, not repeat 6,000. Two facts already in the report decide this.
First, the 12.5% end-of-season stock rate is more than double Cedar & Co.'s own 5% target. A gap this size is not ordinary season-to-season variation; it is a signal that the original 6,000-piece buy was set well above what the season's own actual demand supported.
Second, the corrected quantity is calculated directly from the demand the season actually revealed, 5,250 pieces sold, not from the original forecast that produced the 6,000-piece buy. Repeating the unchanged 6,000-piece buy would repeat the same overbuy, assuming similar demand next season, and leave the same roughly 474 pieces unsold again.
Cedar & Co. should set next season's buy at about 5,526 pieces for this style, using the season's own actual demand as the corrected basis, rather than marking down the leftover stock and repeating the original forecast unchanged.
Using Cedar & Co.'s own illustrative cost price of USD 6.50 a piece:
Repeating the uncorrected buy ties up an extra USD 3,081 in unsold stock compared with the corrected buy, cash that stays on the shelf instead of funding the next season's own new styles.
Open the course workbook's "Terminal stock" sheet. It records units bought and units sold by season end, calculates the end-of-season stock rate against a target, and works out the buy quantity that would have hit the target given the demand the season actually revealed.
[Download the Markdown and terminal stock worksheet](../../templates/T20-C04-markdown-and-terminal-stock-worksheet.xlsx)
1. An export style was bought at 4,000 pieces; 3,760 sold by season end, leaving 240 unsold. The buyer's own target is 4% left unsold. Does this style's end-of-season stock signal an overbuy?
2. Why is end-of-season stock a different measurement from the mid-season sell-through check covered in lesson T20-C04-L01?
| EN | AR | FR | TR | Meaning |
|---|---|---|---|---|
| Sell-through rate | معدل البيع الفعلي | Taux d'écoulement | Satış oranı | The share of stock actually sold within a planned period, used to judge whether a forecast was right. |
| Forecast | التوقع (توقع المبيعات) | Prévision (prévision des ventes) | Tahmin (satış tahmini) | A company's own estimate of what it expects to sell, used to decide how much to produce before any specific sale exists. |
| Stock cover | تغطية المخزون | Couverture de stock | Stok kapsama süresi | The number of weeks a brand's current stock is expected to last before it runs out, given its normal sales rate. |
| Margin | الهامش | Marge | Marj | Profit divided by the selling price, shown as a percentage of what a company sells for. |
| Shop price | سعر المحل | Prix boutique (prix de détail) | Mağaza fiyatı | The price the customer pays at the till. Also called the retail price. |
You now know how to read the stock still unsold at season end as feedback on a buy's own accuracy. The next lesson looks at how to recover value from stock, or the raw material behind it, once it is clear it will not sell as first planned. Back to the course map