Contemporary Mathematics for Business & Consumers 8th Edition by Robert Brechner,Geroge Bergeman

Exercise 36

Another way to look at the concept of inventory turnover is by measuring sales per square foot. Taking the average inventory at retail and dividing it by the number of square feet devoted to a particular product will give you average sales per square foot. When you multiply this figure by the inventory turnover rate, you get the annual sales per square foot.
It is important to know the amount of sales per square foot your merchandise is producing, both on average and annually. These figures should be tracked monthly and compared with industry standards for businesses of similar size and type.
You own Electron Magic, a large multi product electronics store in a regional mall. The store has 10,000 square feet of selling space divided into five departments.
a. From the table below, calculate the average and annual sales per square foot. Then calculate the annual sales for each department and the total sales for the entire store.

b. If industry standards for this size store and type of merchandise is $200 per square foot in annual sales, which departments are below standards What can be done to improve the situation
c. (Optional) Use the Internet to research and share with the class the current "industry standard" sales per square foot and inventory turnover rates for the merchandise categories of your store.