merchandise hierarchy and settings - university of … arc training manual merchandise hierarchy and...

MBS ARC Training Manual

Merchandise Hierarchy and Settings

This chapter focuses on how items and inventory are structured in the

Merchandise and Accounting application. This section includes review of

system hierarchy and inventory structure as well as a discussion of select

settings that tie into this structure. The MBS System is a Retail Accounting

system, and a summary of calculations for this type of system is also

available in this chapter.

This manual covers the following aspects of merchandise item records:

System Hierarchy ................................................................................. 3

Company .......................................................................................... 3

Store ................................................................................................ 3

Inventory Structure and Settings ............................................................ 5

Division ............................................................................................ 6

Department ...................................................................................... 6

Class ................................................................................................ 6

Class Settings ................................................................................... 7

Item ................................................................................................ 9

Merchandise Management Settings ....................................................... 10

Logo-Color-Size Codes ..................................................................... 10

Min/Max Models ............................................................................... 12

U/M Code ....................................................................................... 12

Season Code ................................................................................... 16

Item/Shelf Location Assignment ........................................................ 17

System Setup .................................................................................... 20

Calendar Control .............................................................................. 20

ARC – Hierarchy and Settings MBS Systems

MBS TEXTBOOK EXCHANGE, INC. PAGE 2 OF 25

Create a Calendar ............................................................................ 20

Buyer Codes ................................................................................... 24

Event Code ..................................................................................... 25



System Hierarchy

ARC groups merchandise and text inventory based on a structural hierarchy.

Well-planned data structure enhances report analysis and record-keeping. A

good deal of thought should go into the development of the system

hierarchy, frequently referred to as the class structure.

For inventory, the structure flows from general (Division Level) to specific

(Class Level). Each grouping level is an extension of the previous level of

grouping and should be numbered accordingly.

Divisions are identified by a single digit, Departments by two digits, and

Classes by three digit. Class 320, for example, should indicate that it is

grouped under Department 32 and Division 3.

Company

The Company is the customer account at the broadest point. It refers to the

corporation or university with which the stores are associated (for example,

MBS University). A company can consist of single or multiple stores (for

example, Store 1 is the MBS Bookstore, Store 2 is the Corner Shop, Store 3

is the Ashland Extension Campus – all stores are part of the MBS University

store system).

Division > Department > Class structure is established at company level and

applies to all stores unless otherwise configured. Changes at these levels

are coordinated with your MBS Client Representative.

Store

Stores are established within a Company. It is important to note that item

records and vendors in Merchandise are maintained at a company level.

Beyond that, stores can be maintained separately from each other for

Inventory value and Sales performance. Inventory and sales are tracked

both by store and by company in the Stock Ledger and General Ledger.

Data contained for the store will be used to prepopulate numerous fields and

processes throughout the system. For example, store address information is

used in processes such as Purchase Orders, Receiving, and Returns.



Store Inquiry

The core settings for a store can be displayed as an inquiry in Merchandise.

Please note that these preliminary settings are set up by MBS

Implementation and Client Services. Any changes must be coordinated

through your Client Representative.

1. To view your store information, go to Buyer Reports/Inquiries >

Inquiries > Master Files > Stores

2. Highlight the store for which you would like to view information. Click Display.

Figure 1: Store Information

Store Number — 001-999

Address, Phone, City, State, Zip — Store information that will display on

purchase orders, returns, invoices, etc.

Postal Code — only used for customers located outside the United States

District — groups stores with similar pricing and sales patterns



Load Factor — indicates a stocking fee % assessed by transferring store or

warehouse

Store Type/Store Code/Post Code —these options are not currently used

at this time for store settings

Print Tickets —when using Warehouse Management, yes will print tickets

as part of distribution

Store Tax Rate — cumulative rate of state and local sales tax by store

Inventory Structure and Settings

Inventory records themselves are structured at the company level. The

example below explores the grouping that makes up the inventory structure

in Merchandise.

Division 3 - Supplies

Department 30 - General Supplies

Department 31 - School Supplies

Class 310 - Paper Supplies

Class 311 - Notebooks

SKU 200107

Notebook, College Ruled

Type Level

Red Notebook, Blue Notebook, etc

SKU 200108

Notebook, Wide Ruled

SKU 200109

Notebook, No Lines

Class 312 - Ring Binders

Department 32 - Art Supplies



Division

Division is the broadest order of structure within a Company. It is a single

digit numerical field, and up to nine divisions are available. Examples at this

level are Division 1: Textbooks, Division 2: General Merchandise, Division 3:

Supplies, Division 4: Apparel, etc. In the example above, Division 3 refers

to Supplies.

A Division cannot be deleted once it is assigned a Department.

Department

Department is a less-broad order of structure that is assigned to a Division.

It is more specific than Divisions and extends from the Divisions’ structure.

Departments consist of a two digit number between 10 - 99. Examples at

this level are Department 30: General Supplies, Department 31: School

Supplies, Department 32: Art Supplies, etc.

Often Departments are structured so the first number (3- in our example)

matches the Division number (3: Supplies). It is acceptable as well to

structure Departments with different first numbers to a Division as needed,

but it is recommended to organize these Departments so they flow logical

from Division and into Class.

For example, Division 1: Books may have Departments 10 – 19 assigned for

textbook departments. Department 20 – 29 may be assigned for

Trade/General books in Merchandise, but still report to Division 1 as book

type departments.

A Department cannot be deleted once it is assigned a Class.

Class

Class is the last structure in the inventory hierarchy before individual SKU’s,

and several details associated with inventory and item records are

established at this level. Class-level records establish such critical

information as the default mark-on % (margin), Cost Complement, General

Ledger inventory levels, and non/taxable status for retail based accounting.

Classes are the most specific order of formal hierarchy established and

extend from their Department structure. Stores may create Classes 100-

999. An example at this level is Class 311: Notebooks (under Department

31: School Supplies; Division 3: Supplies).



Classes are the first level at which a Sales transaction may be conducted.

Class sales are often associated with items that do not need tracked at an

individual SKU level. Since Classes do not exist at a per-unit level, Class-

level sales will post only cost and retail values to the Inventory Stock Ledger

as opposed to inventory quantities.

This is also the level where inventory groups are mapped to desired General

Ledger accounts. Many Classes may be mapped to a single General Ledger

Account, but a single Class may not be mapped to numerous General Ledger

Accounts.

Classes have an established default markon % (margin). Each item within a

Class should have a similar markon % value. ARC uses information

gathered at this level to calculate Cost Complement, a critical value which

serves as the basis for valuing the store inventory.

A Class cannot be deleted once it is assigned an Item.

Item Records

SKU information is attached to a class to allow for individual items to be

tracked in inventory. An example at this level includes SKU 2000107:

Notebook, College Ruled (assigned to Class 311: Notebooks; part of

Department 31: School Supplies; an extension of Division 3: Supplies).

Many enhanced features available within ARC are designed to be used at the

item-level and will be unavailable to most class-level sales activities.

Examples of these features include Type Codes, Season Codes, Min/Max

Values, Units of Measure, Kits, etc.

Items are discussed in more detail in the Item Records chapter.

Class Settings

Just like Divisions and Departments, Classes are initially set up by the MBS

Implementation and Client Services teams. If you need to create or change

a class, contacting your MBS Systems Client Representative. Class

information can be reviewed though through inquiries.

1. To view your store’s class-level information, go to Buyer Reports/Inquiries > Inquiries > Master Files > Class/Subclass



2. Highlight the class for which you would like to view information. Click

Display.

Figure 2: Class Information

Note: all fields displayed with an asterisk (*) are required fields.

(*) Class/Sub-Class Number — 3-digit number 100-999. Sub-Class is

not supported.

(*) Description — Alpha-numeric label used to identify the Class category

(*) Department — Department under which the Class is assigned

Season, Min/Max Units, Vendors, and Buyer Codes — Used primarily

for items and are typically blank for classes (these are discussed further in

the Item Records chapter)

Year-Round Discount — Percentage of universal discount for a given class

(this is rarely used)

(*) Default Markon % — Establishes a target Margin for items grouped

under this Class. The markon % refers to the percent that is added to an

item’s cost to create a retail price, and it creates a reciprocal record called



cost complement. This entry is an estimate for the markon %, and actual

Invoice and Sales activities will determine actual markon % for Class.

(*) Taxable/Non Taxable — These flags dictate how the class, and items

in the class, are taxed on POS and inSite. Items in a class flagged as Non

Taxable will default to not being charged tax during a sale transaction.

Allow Loyalty Sales — Permits items within this class to be sold within the

Loyalty Program, the purchase of which will contribute to the accrual of

Loyalty Points.

Exclude from Loyalty Redemption — Restricts the use of Loyalty Points

from being utilized as part of the purchase for items within this class.

G/L Account for Inventory — Maps to the General Ledger Asset account

reserved for this type of inventory (e.g., Inventory Supplies, Inventory

Clothing, etc.). This enables inventory changes to flow into General Ledger

(or to be transmitted via a Gateway to campus accounting, if available).

G/L Account for Cost of Sales — Maps to the General Ledger Expense

account (e.g., Cost of Sales, Cost of Goods Sold) and allows Sales and Cost

of Goods to flow to General Ledger (or to be transmitted via a Gateway to

campus accounting, if available).

Rental Class — Used only for those classes associated with the Textbook

Rental module. Class examples: New Textbook Rental Class, Used Textbook

Rental Class (non-serialized); Rental Textbook Class (serialized).

Non-Merchandise Item for Rental — Textbook Rental Classes only.

Refers to the non-merchandise code set up for the initial purchase amount of

a textbook rental. This is set up in Settings > POS > Non-Merchandise Item

Codes.

(*) UDT Class — Used only for the textbook class that is defined for

Universal Digital Textbooks (eBooks)

Item

Items are individual units for retail sale and the level at which Stock Ledger

tracks inventory at quantity, cost, and retail values. With the exception of

class-level inventory and sales, all documentation from processes such as

ordering, receiving, and sales will track at the item level.



Items assigned to the same class should have a similar margin.

There are many aspects to working with items in Merchandise, and these will

be expressed further in the Item Records chapter.

Merchandise Management Settings

Logo-Color-Size Codes

Settings > Merchandise > Logo/Color/Size Codes

Logo/Color/Size (L/C/S) Codes are used to describe variations of a single

SKU by characteristics such as logos, colors, and sizes. These are most

commonly used with clothing and merchandise with several sizes and colors.

Navigate to Settings > Merchandise > Logo/Color/Size Codes to work with

these codes.

The table defaults to Logo codes first. Use Change Group Type to cycle

through to the tables for Color and Size. The codes are created by clicking

Add and entering a two digit, alpha-numeric, code and a short description.



Clicking Work with Detail from the options provides a table entry for what

types of Logos, Colors, or Sizes are included in this group code. A Type

Code consists of a 3-digit numeric Code, Description, Short Type

(Description), and Sequence number.

As Type Codes are user-defined, it is best to establish a convention in order

to keep the codes manageable. To help start the process, here are a few

considerations:

Keep it simple. If clothing is categorized as Small, Medium, and Large for Men, Women, and Children, use those under one group (i.e.

something like Basic Sizes) as opposed to creating separate groups for each.

Create Type Code/Descriptions with your inventory in mind, not your vendors.

o i.e., “Red Dark” is equivalent to “merlot, crimson, burgundy, etc.” It is best to use a naming convention you, your staff, and

your students are familiar with.



When displaying on inSite, adding types to item UPC’s, ordering, and

printing barcodes, the type code table displays in a drop down. Keeping the detail in the type code specific helps avoid large tables to

maintain later in the system.

o For instance, if Red, Blue, and Black are the only colors for the

University sport teams, a separate “School Colors” group with these three defined can provide smaller tables elsewhere when

ordering items with sports themes.

Click Save to complete edits to the type level detail and that detail will be

associated with that Type group code.

Type Codes provide a sub group of items that also provide detail throughout

Receiving, Stock Ledger, and Sales. The Item Records chapter will go into

more detail about Type Codes.

Min/Max Models

Item Records have an option to set a minimum and maximum need for

inventory quantity. This is helpful for select reports (i.e. Suggested Needs

Report) as well as for replenishment.

Settings > Merchandise > Min/Max Models is an area to review and

maintain current min/max settings on an item record. Min/Max Models will

be discussed further in the Item Records chapter.

U/M Code

Unit-of-Measure (U/M) Codes are used to convert Inventory items received

in bulk to a per-unit quantity for sales (POS/inSite) and Stock Ledger

(reporting).

U/M Codes are setup and configured over multiple stages. The first step is

to establish a code (i.e., box, carton, case, pack, etc.). This descriptive code

is then defined in the Item Record in terms of bulk quantity (i.e., box of 12),

bulk cost, and bulk retail values of the selected descriptive U/M Code.

Finally, all U/M associations (system-wide) are displayed under the Item/UM

Assignment feature.

Set up for a U/M code description is in Settings > Merchandise > U/M

Codes.



Click Add to create a code. A two-digit, alphanumeric code and a

description are required.

Once the code is created the Unit of Measure case be associated with an

item and an assignment can be made for number of units and the list cost

and retail for the entire group of items (used for ordering and receiving –

individual cost and retail will be defined on the item level).

Assigning Units of Measure is typically done from the item level, but it can

be done as well from settings. The steps for working with Units of Measure

on an item level will be in the Item Records chapter. Follow the steps below

to work with Units of Measure instead from Settings.

1. Navigate to Settings > Merchandise > Item U/M Assignment.



2. Click Add to assign an item Units of Measure for the first time, or search for an item and Change to edit current U/M settings.

3. Ensure the proper Item Number is selected, and type or select a U/M Code from the drop-down menu. The Informational U/M is optional

and may provide an additional level of description for this U/M.

2-decimal COST and

RETAIL



4. Enter the Quantity of items contained in the package for this item

(e.g., box of 12, enter 12) in the Selling Units per a U/M.

Note: Each Item Record may only use a specific U/M code once (e.g., there

can only be one “box” for this item). However, each Item Record may use

multiple U/M relationships (i.e., box, carton, case, package, etc.).

5. Enter the bulk Cost and Retail in the U/M List Cost and U/M Current Retail fields. These fields may be updated in the Purchase Order

and/or in Receiving and are most easily worked with in those features.

Freight Amount per U/M is informational and reflects what shipping

costs typically would be for the U/M package of this item. This is more

commonly assigned directly to an invoice and is not required here.

U/M Minimum Order QTY mirrors Vendor minimum order information.

6. Click Save. An Optional screen appears that is used with the

Warehouse application. The system defaults a ‘1’ in Pallet TI, Pallet HI and Pallet Size. All other fields are left blank until Save is

clicked again. Below is an example of a completed screen. Notice that Height of U/M, Length of U/M and Width of U/M fields are

populated.

When using U/M Assignment in the Merchandise Items record, the process is

identical. This will be reviewed in the Item Records chapter. Information

regarding ordering and receiving Units of Measure will be in the Purchase

Order and Receiving chapters as well.



Season Code

Settings > Merchandise > Season Codes

Season Codes are information-only “tags.” They provide an additional field

by which most Sales, Inventory, and other reports/inquires may be filtered.

As a general rule, Season Codes are best used when defining records that

are related to specific seasons or periods of special item sales (e.g.

winter/fall/summer/spring or football/soccer/baseball/etc.).

Season Codes consist of a Description field and single-character Season

code, and are associated in the Item Record for use in many Reports and

Inquiries.

Figure 3: Season Codes

1. To create a season code, select Add.

Figure 4: Season Code Entry

Season Code — Enter single alphanumeric code.

Season Description — Enter code description (limit 20 characters).



2. Click Save to continue. Then click Save to verify. The fields will blank

to allow for additional entry. Once finished with the entry, click Go Back to return to the code listing.

Item/Shelf Location Assignment

Merchandise > Maintain Items > Shelf Locations

Shelf Location Codes are used to define where an item is located within the

store. They must first be established before they can be assigned to items

as part of the Item/Shelf Location process in the Merchandise Items menu.

1. Click Add to assign a new shelf location code.

2. Verify the Store Number where the shelf code is being set up and then

enter the shelf Location, Description, and Picking Sequence.



Shelf Location accepts up to 15 alphanumeric characters and description

accepts up to 30. Pick Sequence is optional and is used to determine the

item order on a Pick List. This is used primarily for store transfers.

3. Multiple shelf locations can be added at once. Click save to complete

the entry, and the shelf locations will now display in the table.

Note: It is advisable to keep consistent with the same descriptors as the

floor map used with Physical Inventory, where possible.

Item/Shelf Location Assignment

Settings > Merchandise > Item/Shelf Location Assignment

This option permits the user to assign pre-established shelf locations to

particular Item Records.

1. Add/Change an item from the Item/Shelf Location Assignment menu.



2. If adding, the user is prompted to select the store and item they wish to assign a location. Click Save.

3. Select from the Shelf Location drop-down or manually enter the

desired location Click Save.



System Setup

Calendar Control

A calendar must be defined for each year in order to allow the system to

process data. The system can create the calendar automatically following

the standard accounting “4-4-5” calendar format. Two other calendar

formats are also available. The calendar can also be created manually.

NOTE: It is recommended that the new fiscal calendar be created prior to

the last week of the old calendar. Calendars can be created in advance and

at any time.

The system does not automatically default to the current calendar month but

will maintain the current “open” month as shown in the system. At the end

of each month it is closed in order to advance the next open month in the

system. As long as ordering, receiving, and similar adjustments display the

correct calendar month at the transaction level, the system will sort the

records accordingly once previous months are closed out.

All data, except sales, are posted by the user to the appropriate month (the

month the activity occurred). Sales are posted based on the date the sales

were processed at the register. The Control File question of “Do

merchandise period endings differ from calendar month ends?” also

determines which month the sales post.

Create a Calendar

1. Navigate to Settings > Other > Calendar Control.

Yes — System will generate fiscal calendar from criteria defined below

No — User will create the fiscal calendar manually

2. If Yes is selected in Calendar Control, the following screen appears:



Fiscal Week Ending Date — Enter the last day of the first week of the new

fiscal year. For example, if fiscal year 2018 begins in July 2017 and a week

is Sunday to Saturday, 07/01/17 would be entered as the ending date for

the fiscal year.

Fiscal Year — Enter the year for the new fiscal year. This identifies that

starting with the first week ending date, the fiscal year will be the year

entered here. From the example above, 2018 would be entered.

Period Sequence — Select the period sequence for this fiscal year. Using

the table below, enter the correct sequence based on the first month of the

fiscal year.

4-4-5. January, April, July, or October

4-5-4. February, May, August, or November

5-4-4. March, June, September, or December

53 Week Year — Determine if the fiscal year has 52 or 53 weeks. The best

way is to simply count the number of weeks on a calendar. If the fiscal year

is 53 weeks, answering Yes displays an additional field for the extra week.

1. Designate which fiscal year will include the extra week. General accounting practices assign this week to the last period of the fiscal

year.

2. When finished with this screen, click Save. The system creates the

calendar and returns to the Main menu.



If No is selected in Calendar Control, the following screen appears:

Columns for the Date, Week, Period, Year, Season, and Closed display.

Since this is a fiscal calendar, notice that 06/24/17 is Week 52, Period 12,

and Year 2017. July 1st, 2017 is the first week of the new fiscal period for

the fiscal period of 2017 – 2018, and therefore displays as Week 01,

Period 01, Year 2018.

At any time, a user may view the calendar detail.

1. Click Calendar Control and answer No to “Do you want the system to

create the calendar?” Click Save.

The weeks are displayed in chronological order. By entering the beginning

date of the new fiscal year in Position to, the user can view the fiscal weeks.

2. To create a new calendar, select Add.



Figure 5: Calendar Control: Manual Assign Step 2

Week Ending Date — Enter date the first week ends.

Fiscal Week — Enter number of total weeks according to fiscal calendar.

Fiscal Period — Enter number of the period according to fiscal calendar.

Fiscal Year — Enter fiscal year.

Season Code (optional) — Used in conjunction with the Replenishment

module.

Close Code — System defaults a ‘C’ in the Close Code field when weeks are

closed. Note that manually entering a ‘C’ into this field does NOT close out a

given week in the system. Weeks can be closed from the following screen;

similar to Month’s- and Year’s-End closing:

Settings > Period Ending > Week

3. Click Save to verify the changes. Once all weeks have been created, click Go Back to return to the week listing screen.



Buyer Codes

Settings > Other > Buyer Codes

Buyer Codes can be used in varying ways. For example:

To identify a specific individual on Purchase Orders, SKU’s or Classes

As a prefix to the Purchase Order numbers To identify vendors by the merchandise they sell

As an additional benefit to the variety of uses for these codes, there are

several reports available that offer Buyer Codes as selection criteria.

When the Abbreviation field has the buyer’s name entered it then

populates the Written by field on the purchase order header to further

identify the purchase order.

Buyer codes may be used to define buyers for specific departments/classes

such as clothing, electronics, textbooks, supplies, etc. through the use of

Buyer Codes.

1. To create a Buyer Code, select Add.



Buyer Codes are tags that consist of (3) character spaces, a name

description, as well as Buyer Abbreviation and Buyer Initials fields (both

optional). Again, Buyer Abbreviation will populate into the Written by field

on purchase orders.

Event Code

Settings > Other > Event Codes

Event Codes are used to track “in-store” events, promotional sales, or

catalog items. It is used for tracking purposes only and can be attached to

classes or SKU’s.

Event Codes consist of a 3-digit numerical Event number, a Description field,

fields for Status A (Active) or D (Inactive), and Start/End Dates. Event

Codes are attached to an item in the Item Record and/or Purchase Orders,

and are used predominantly with Purchase Orders.

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