Merchandising Math: A Managerial

Approach. ISBN 0-13-099588-6 New Jersey: Prentice Hall, 344 pages.

Kincade, D.; Gibson, F.; Woodard, G. (2004)

In today’s fast paced retail business environment, now being driven by the most up-to-date technology, students must know how to apply classroom theory and concepts to the real world of business as soon as they arrive on the job scene. They must understand not only marketing concepts, retailing and merchandising principles and the managerial decision-making process utilized in day-to-day business transactions of the retail store; but they must also understand how to identify and apply mathematical formulas needed to solve pressing retail operational problems.

This textbook, written for more advanced students in a design or merchandising program or for the beginning student in a retail business major, is the only retail math text that integrates the concepts of marketing principles, retailing and merchandising theories, strategic business planning and managerial decision-making processes, with mathematical formulas used to operate a business in the current retail environment. Industry consultants and corporate retailers as well as small business owners will also find this text most helpful for analyzing and solving everyday retail problems.

The text is organized into four segments with Part I providing an overview of merchandising and retailing, basic spreadsheet format, and pricing formulas that are the basis for understanding other materials in the book. The authors begin each chapter by introducing background information and basic concepts in a clear and concise manner. Then, these concepts are developed into a higher order of understanding of complexities either throughout that chapter or in subsequent chapters. For example, Chapter 2 introduces the student to the relationships between the retail elements of pricing (retail price, markup, and cost), and Chapter 3 addresses the skeletal Profit and Loss Statement of the retail business operation as it relates to those price elements. Then Chapter 4 provides an explanation of an expanded Profit and Loss Statement and leads the reader into Part II: “Planning”.

In Part II: “Planning”, the student is shown in Chapter 5 how the strategic planning process relates to the P & L Statement and the environmental scan that is used in Chapter 8 when the student learns the steps in calculating Six-Month Merchandise Budgets for both new and existing businesses. Chapter 6 provides a background on the importance of realistic sales planning while Chapter 7 examines the importance of planning appropriate stock levels in order to meet planned sales goals. The concepts of turnover, stock/sales ratio, average stock and average inventory are also explained with accompanying step-by-step mathematical examples that bring daily retail operations directly into the classroom. Thus assimilating seemingly unrelated information becomes manageable and applying this compilation of knowledge when calculating the Six-Month Merchandise Budget provides the student with greater insights as well as problem solving skills that can be utilized on the job.

Part III: “Buying” gives a realistic “bird’s eye” view of the processes for procuring merchandise in the marketplace. It takes the student from the initial stage of the forecasting process (Chapter 9) to organizing the forecasting information in order to build assortment plans (Chapter 10), to organizing the market trip (Chapter 12) to controlling the buying process or calculating the open-to-buy (Chapter 11) to selecting the retail/vendor matrix in order to negotiate the buying terms for placing the merchandise order with the vendor (Chapter 13). Both quantitative (business) and qualitative (emotional) forecasting are discussed and the merger of the two result in the integration of marketing, merchandising, retailing and mathematical concepts that provide a realistic picture of actual functions in a retail business operation. Part IV: “Selling” examines how buying functions relate to inventory levels, price adjustments and sales promotional activities (Chapters 14, 15, & 16).

In each chapter the authors present formulas and then proceed to provide a step-by-step explanation of the calculations with detailed examples in clearly understandable figures. At the end of each chapter the authors include key terms, discussion questions, and problem solving exercises as well as computer applications. Additionally, spreadsheet applications are provided for each concept and a Study Wizard CD-ROM is included with the text so that the student has a wealth of additional problems and practice quiz questions.

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