Retail Math Pre-Test

1.  Calculate the same store sales change given the following information:
TY Sales = $5,000
LY Sales = $4,900

 

2.  Calculate average price given the following information (round to the nearest penny):
Units sold = 2,000
Sales $ = $5,000

 

3.  If a product’s initial retail price is $2.25, and its unit cost is $1.00, what is the initial margin?

 

4.  If a product’s initial margin is 25% and its price is $40, what is the product’s cost?  (round to the nearest penny.)

 

5.  A product category had sales of $500,000 and markdowns of $100,000.  What was the category’s markdown percent?

 

6.  A product category had retail inventory turns of 7.0 and sales of $1,450,000.  What was the category’s average inventory level in dollars?  (round to the nearest penny.)

 

7.  Calculate GMROI based on the following numbers:
Annual profit = $300,000
Average inventory at cost = $75,000

 

8.  If a product has sales of $365,000 and an average retail inventory of $24,500, what is that product’s retail turn?

 

Note that a printable version is available HERE.
Also the answer key can be viewed HERE.

 

Getting Students Interested in Math

A couple of years ago my department chair asked to attend one of my Retail Strategy classes.  Our college had decided to begin emphasizing retail more strongly in our curriculum, and they were curious about my classes.  That day I was covering turnover, sell-through and weeks of supply in class – not some of the most thrilling material in the course.  After class, my chair asked me how on earth I managed to keep 60 students paying attention and taking notes when we were covering math!  I told him the truth – I scare them .

The biggest problem I faced when I started teaching retail math to my undergraduate students was that they didn’t care.  They simply didn’t see math as being that important for their futures.   So, they didn’t listen, take notes, do the homework, etc.

The problem was fixed for me when a major corporation offered to let me use their retail math employment screening test in my classes.  The test was 15 questions long and asked job applicants to calculate everything from sales increases to turnover to GMROI.  If you couldn’t pass the test, you couldn’t work for their company.  So, I started using it as a pre-test on the very first day of the retail math section.  My students typically average a 40% on the test, and it scares them half to death.

The results of using this test?  Attendance in my classes has shot up to nearly 100%, every single student takes notes, and it is rare for them to miss doing a homework assignment.

I’ve included a sample test on this blog that is available here.  Feel free to use it with your classes.  If you do, or if you use something similar, I’d love to hear about your experiences.