Retail Math

Inventory Turnover Homework

A category manager for a sporting goods category shows annual retail sales of $$250,000$ with an average retail

inventory of $$110,000.$ What is the category's annual inventory turnover?

The category manager notices that last year their inventory turnover number was $2\mathrm{.}0.$ The category manager also

notes that while last year's inventory levels were fairly stable, this year they are struggling to keep several of their

products in stock.

What could the category manager infer about the health of their current inventory turnover number?

Refer to the table below to answer parts $a-d.$

a$.$ Calculate the Retail Turn, Cost Turn, and Unit Turn.

b$.$ Why are the results from each calculation different?

A pet food buyer needs to forecast sales for their category. If they expect to have an annual average retail inventory

of $$5,000,000$ with an inventory turnover of $7\mathrm{.}8,$ what should their sales forecast for the year be$?$

If the inventory turnover is $7\mathrm{.}8.$ Does this mean the entire physical inventory has been replaced $7\mathrm{.}8$ times during the

year? If not, what does it mean?

A shoe store carries men's shoes, women's shoes, and children's shoes. Comparing their numbers $($see table$),$ calculate

GMROII for each department. Which department is most productive in creating a return on the store's inventory

investment? Which department is least productive?

Based on the following numbers, what is the shoe store's overall GMROIl for the year.