Matching Supply with Demand: An Introduction to Operations Management 4th Edition by Gerard Cachon T
Cheap Retailers
The following table shows financial data (year 2006) for Dirt Cheap Wholesale and Kwiki-Mart, two U.S. retailers.
DIRT CHEAP WHOLESALEKWIKI-MART STORES
Inventories ($MM)475440894
Sales (net $MM)59217397206
COGS ($MM)52762326606
Assume that both companies have an average annual holding cost rate of 20% (i.e. it costs both retailers $2 to hold an item that they procured for $10 for one entire year).
12) How many days, on average, does a product stay in Dirt Cheap's inventory before it is sold? Assume that stores operate 365 days a year. (Round the answer to 2 decimal places.)
13) How much lower (expressed in dollars) is, on average, the inventory cost for Dirt Cheap compared to Kwiki-Mart of a house hold cleaner valued at $5 COGS? Assume that the unit cost of the house hold cleaner is the same for both companies and that the price and the inventory turns of an item are independent. (Round the answer to 3 decimal places.)