Why this is mistaken
Label an estimate with its purpose, population, method, assumptions, and replacement evidence. Test the historical margin before using it. For a retail estimate, declare the variant and keep markup, markdown, return, transfer, and shrinkage treatment consistent.
Where to watch
When this mistake may appear
- The formula proves ending units.
- Use the historical margin without testing current mix.
- Move markdowns in or out of the ratio as needed.
Check your work
Your work may contain this mistake if:
- Reports estimated inventory as observed, omits the estimate purpose, or changes the retail variant without changing the model and evidence.