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2. Cheap Retailers The following table shows financial data (year 2006) for Dirt Cheap Wholesale and Kwiki-Mart, two US retailers. DIRT CHEAP KWIKI-MART WHOLESALE SI ORES 40894 Inventories (SM) Sales (net SM) COGS (SM) 4754 59217 52762 397206 326606 Assume that both companies have an average annual holding cost rate of 20% (ie, t costs both retailers $2 to hold an item that they procured for $10 for one entire year). a. 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 b. How much lower (expressed in S’s) 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 household cleaner is the same for both companies and that the price and the inventory turns of an item are independent.
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