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The following table shows financial data for Costco and wal mart:
CostcoInventories: $3,643Sales (net): $48106COGS: $41651
Wal Mart:Inventories: $29447Sales (net): $286103COGS: $215493
Assume that both companies have an average annual holding cost rate of 30 percent.
a. How many days on avg. does a product stay in Costco's inventory before it is sold? Assume that stores are operated 365 days a year.
b. How much lower on avg the inventory cost for costco compared to walmart of a hh 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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What are some different companies that could benefit from using this type of inventory management and why?
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TWO HANDED CHART WITH 10 OPERATIONS
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