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Practitioner · Course 1: Allocation Fundamentals · Lesson 1 of 5

What allocation decides that open-to-buy and a season plan do not

Level: PractitionerTime: 45 minutesOrder used: A (the T-shirt, Fairway Stores' own 15,000-piece export order from Northline Apparel)Tool: Store allocation worksheet
For a buyer who already approves open-to-buy and reads a WSSI, and now has to decide which of a retailer's own stores actually receive a confirmed shipment. No previous lesson is needed. Figures are teaching examples in US dollars.
RetailerFairway Stores, buying Order A wholesale from Northline Apparel
Export orderOrder A, 15,000 pieces, made to order by Delta Garments
Season total planned15,000 pieces across Fairway Stores' own 10 stores
First shipment1,000 pieces arriving at Fairway Stores' distribution centre
Store base10 stores, ranging from flagship to small-format
What this lesson measuresWhich decision open-to-buy and the WSSI leave unmade once stock reaches the distribution centre
02Opening

This page explains what a store allocation decision settles that open-to-buy and a season plan leave open

This page is for a buyer at a retail chain who already knows how to approve open-to-buy for a season and how to read a weekly sales, stock and intake plan, but has never had to decide exactly which of the chain's own stores receive a confirmed shipment. At work, a buyer who stops at open-to-buy and the WSSI has only decided how many pieces to buy for the whole season and which week they should arrive at the distribution centre; neither decision says whether Store 1 gets 400 pieces and Store 10 gets ten. This lesson mainly teaches the information flow: it shows the boundary between what a season plan already fixes and what allocation still has to decide once stock is sitting in the warehouse.

Fairway Stores has approved open-to-buy for 15,000 pieces of Order A and built a WSSI that says the first 1,000 pieces should reach its distribution centre in week one of the season. Without an allocation decision, that 1,000 pieces has nowhere specific to go: it cannot simply be split evenly across Fairway Stores' own ten stores, because a flagship store on a busy street sells this style faster than a small-format store in a quiet suburb.

03Before you start

What you need, and what this lesson does not cover

You need: no previous lesson from this track. A working knowledge of open-to-buy and a WSSI, as taught in Track 20, is assumed but not required to follow the numbers here.

By the end of this lesson you can:

  • define store allocation as the decision that splits a confirmed shipment across a retailer's own stores;
  • explain what open-to-buy decides, what a WSSI decides, and what neither of them decides;
  • name the store-level information an allocation decision actually uses;
  • recognize why an evenly spread shipment can still be the wrong allocation decision;
  • describe, in outline, when in the shipment's journey an allocation decision must be made.

Not covered here: the actual store-level calculation, covered from lesson T21-C01-L02 onward, and choosing between allocation methods, covered in lesson T21-C01-L03.

04Key terms

Words you will meet in this lesson

TermMeaning
Store allocationSplitting a confirmed shipment quantity across a retailer's own stores or shops, rather than shipping it all to one central point.
Selling potentialAn estimate of how much a specific store is likely to sell, usually built from that store's own past weekly sales rate for a similar style.
Store baseThe specific set of stores counted in a sales comparison; it must stay the same in both periods for a like-for-like comparison to be valid.
IntakeNew stock arriving into a retailer's own stockroom or distribution centre in a given week, from a confirmed order.
Weekly sales rateThe average number of pieces of a style sold in one week, found by dividing total pieces sold by the number of weeks elapsed.
Distribution centreThe central warehouse a retailer's confirmed shipments arrive at before any onward decision splits stock toward individual stores.
05Teaching
The rule

Open-to-buy fixes how much a season can spend, a WSSI fixes when stock should arrive, and allocation fixes which store actually receives it

Open-to-buy sets a season's own total spending limit before individual stores are considered at all, and a WSSI turns that season total into a week-by-week plan of sales, stock and intake for the retailer as a whole. Neither decision reaches down to a single store: both stop at the retailer's own distribution centre door. Allocation is the separate decision that takes a confirmed shipment quantity, already approved by open-to-buy and already phased by the WSSI, and splits it across the retailer's own individual stores according to each store's own selling potential.

Fairway Stores' first shipment already approved by open-to-buy and phased by the WSSI: 1,000 pieces
What you meet in real life

Allocation is needed wherever a single confirmed quantity has to reach more than one selling point

What can differThe shapes you will meetWhy it matters
Export order into a multi-store chainFairway Stores receives Order A's own first 1,000-piece shipment at one distribution centre and must then split it across its own 10 stores.A single landed shipment is not automatically the right quantity for any one store; the split still has to be decided store by store.
Domestic Make to Stock reorderA domestic retailer such as Cedar & Co. reorders from Delta Garments against its own forecast and then allocates the reorder across its own 12 shops.A reorder's allocation can use real, recent store sales data, unlike a first shipment, which has no sales history of its own yet.
Make to Order first shipment, no store sales history yetOrder A's first 1,000 pieces have never been sold in any Fairway Stores shop before, so allocation must rely on a comparable style's own past selling potential instead of this style's own history.Without a comparable style's own history, a buyer risks allocating on guesswork rather than on any real store-level signal.
Hybrid model, initial batch plus a later reorderA first batch is allocated by estimated selling potential; a later reorder, once real sell-through exists, is allocated by each store's own actual results instead.The right allocation method actually changes partway through a season, once real store-level data becomes available.
The case we follow

Fairway Stores' 1,000-piece first shipment sits in the distribution centre with no store-level decision made yet

Fairway Stores has already done the two things open-to-buy and a WSSI ask of it: it approved 15,000 pieces of open-to-buy for Order A's season, and its WSSI phased the first 1,000 pieces to land at the distribution centre in week one. Neither of those approvals says how many of those 1,000 pieces should go to any specific one of Fairway Stores' own 10 stores. The buyer preparing this shipment for allocation has to bring in a third kind of information entirely: each store's own selling potential.

From season total to store shelf: three separate decisionsOpen-to-buy15,000 pieces, seasonWSSI1,000 pieces, week 1AllocationNot yet decidedOpen-to-buy and the WSSI both stop at the distribution centre door.Allocation is the only one of the three that reaches an individual store.
Open-to-buy and the WSSI approve a season total and a shipment date; neither one names a store. Allocation is the separate, still-unmade decision that turns one shipment number into ten store-level numbers.
The worked number

An evenly spread allocation of the first shipment gives every store 100 pieces, whether or not that matches its own selling potential

Fairway Stores' first shipment: 1,000 pieces
Fairway Stores' own store base: 10 stores
An evenly spread allocation, ignoring selling potential: 1,000 / 10 = 100 pieces per store

An evenly spread allocation of 100 pieces per store is a real option, and lesson T21-C01-L03 covers it as one method among several. The point this lesson makes is narrower: 100 pieces per store is a number that open-to-buy and the WSSI never produced and never checked against any store's own selling potential. It came only from dividing the shipment by the store count, which is exactly the kind of allocation decision neither of the earlier approvals made.

The method

Three steps a buyer follows to see where allocation sits in the planning sequence

  1. Confirm that open-to-buy has approved the season's own total quantity and spend.
  2. Confirm that the WSSI has phased a specific quantity to arrive at the distribution centre in a specific week.
  3. Recognize that neither approval has yet named a single store, and that allocation is the next, separate decision still required before any piece reaches a shop floor.
  4. Treat an allocation decision as its own step with its own inputs, not as something a shipment date automatically produces on its own.
The trap

A common mistake is treating a WSSI's own arrival date as if it were also the allocation decision

A common mistake is a buyer assuming that once open-to-buy is approved and the WSSI shows a shipment landing on schedule, the planning work for that shipment is finished. It is not: the WSSI only confirms that 1,000 pieces will exist at the distribution centre in week one, and says nothing about whether Store 1, a flagship location, should receive 400 of those pieces while Store 10, a small-format shop, receives ten. What this costs is real: a shipment left to default to an even split across Fairway Stores' own 10 stores can leave a high-potential store under-stocked within days while a low-potential store still holds most of its own share weeks later, even though the season-level open-to-buy and WSSI numbers both looked correct throughout. This is exactly the gap allocation exists to close, and it closes it only when someone actually makes the store-by-store decision, not when a shipment merely arrives on time.

Same even-split allocation, two very different outcomes by week twoFlagship store: 100 pieces allocated, sold out by week twoAlmost nothing leftSmall-format store: 100 pieces allocated, 80 still unsoldMost of the stock still sitting
An even split can leave a flagship store sold out within two weeks while a small-format store still holds most of its own allocation. The season-level numbers stayed correct throughout; only the store-level allocation decision was missing.
06In plain words

A season's buying budget says how much stock a retailer can afford for a whole season, and a weekly plan says which week that stock should arrive at the warehouse. Neither one says which shop actually gets the stock once it lands. That third decision, splitting one shipment across many shops based on how well each shop is likely to sell it, is allocation, and it has to be made separately every time a shipment reaches the warehouse door. A shop on a busy street and a small shop in a quiet area are rarely owed the same number of pieces, even from the very same box.

07Quick check
  • Open-to-buy sets a season's own total spend and quantity, before any single store is considered.
  • A WSSI phases that total into weekly arrivals at the distribution centre, still without naming a store.
  • Allocation is the separate decision that splits a confirmed shipment across a retailer's own individual stores.
  • An evenly spread allocation is a real method, but it is not automatically the right one for every store's own selling potential.
  • A first shipment with no sales history of its own often borrows a comparable style's own past selling potential.
  • Allocation method can change partway through a season once real store-level sell-through exists.
08Workplace scenario

A buyer at Fairway Stores is told the first shipment "has arrived on schedule" and assumes the planning is complete

Fairway Stores' distribution centre confirms that Order A's own first 1,000-piece shipment has landed exactly as the WSSI planned for week one. The buyer's manager asks whether the shipment is "ready to go" to the stores.

Distribution centre note. "Order A, first shipment, 1,000 pieces, received in full, on schedule against the approved WSSI. Awaiting further instruction before dispatch to stores."

Is the shipment actually ready to reach stores once this note is received? Decide before opening the answer.

Show decision

No, not yet. The note confirms only that open-to-buy's own approved quantity and the WSSI's own planned arrival date were both met.

First, open-to-buy approved 15,000 pieces for the season, and the WSSI phased 1,000 of them into week one. Both of those figures are now confirmed as correct.

Second, neither figure says how many of the 1,000 pieces go to any of Fairway Stores' own 10 stores. "Awaiting further instruction before dispatch" is exactly that missing instruction: the allocation decision.

The buyer still has to decide each store's own share before dispatch can happen, using each store's own selling potential rather than treating "received on schedule" as the end of the planning work.

09What it costs

What an undecided allocation would cost if the shipment defaulted to an even split

Using this lesson's own illustrative figures:

Fairway Stores' flagship store's own estimated weekly sales rate for this style: 20 pieces per week
An even-split allocation to the flagship store: 100 pieces
Weeks of stock an even split actually gives the flagship store: 100 / 20 = 5 weeks

A flagship store with an estimated weekly sales rate of 20 pieces, given only 100 pieces under an even split, holds roughly five weeks of stock cover rather than the longer cover a higher allocation would give it, risking a stock-out and lost sales at exactly the store best placed to sell Order A quickly. Getting allocation right, instead of defaulting to an even split, is what the next lesson in this course actually teaches.

10Working template

Store allocation worksheet: see the three decisions open-to-buy, the WSSI and allocation each make

Open the course workbook's "Decision map" sheet. It lists open-to-buy's own approved season figures, the WSSI's own phased shipment figures, and a blank store-by-store allocation table for you to complete in later lessons of this course, so you can see all three decisions side by side on one sheet before the calculation itself is introduced.

[Download the Store allocation worksheet](../../templates/T21-C01-store-allocation-worksheet.xlsx)

Download the Store allocation worksheet (Excel)

11Check yourself

1. What does an approved WSSI actually confirm about a shipment?

2. A retailer has 10 stores and a first shipment of 1,000 pieces with no store-level decision made yet. What is the safest description of this situation?

12Glossary
ENARFRTRMeaning
Store allocationتوزيع المحلاتRépartition entre magasinsMağaza tahsisiSplitting a confirmed shipment quantity across a retailer's own stores or shops, rather than shipping it all to one central point.
Selling potentialإمكانية البيعPotentiel de venteSatış potansiyeliAn estimate of how much a specific store is likely to sell, usually built from that store's own past weekly sales rate for a similar style.
Store baseقاعدة المحلاتBase de magasinsMağaza tabanıThe specific set of stores counted in a sales comparison; it must stay the same in both periods for a like-for-like comparison to be valid.
IntakeالواردArrivageMal girişi (intake)New stock arriving into a retailer's own stockroom or distribution centre in a given week, from a confirmed order.
Weekly sales rateمعدل المبيعات الأسبوعيTaux de vente hebdomadaireHaftalık satış oranıThe average number of pieces of a style sold in one week, found by dividing total pieces sold by the number of weeks elapsed.
Distribution centreمركز التوزيعCentre de distributionDağıtım merkeziThe central warehouse a retailer's confirmed shipments arrive at before any onward decision splits stock toward individual stores.
13Next

Lesson 1.2: Allocating a season's first shipment across stores by their own selling potential

You now know what allocation decides that open-to-buy and a season plan do not. The next lesson shows how to actually split a first shipment across stores using each store's own selling potential. Back to the course map

14Ladder

RecognizeTell open-to-buy, a WSSI and an allocation decision apart as three separate approvals.
ConnectSee how a season total becomes a phased shipment, and how a phased shipment still needs a store-by-store split.
CompareWeigh an evenly spread allocation against one built from each store's own selling potential.
DecideJudge whether a shipment that has "landed on schedule" is actually ready to reach stores.