Ohio Valley Homecare Suppliers, Inc. (OVHS), had $20 million in sales in 2015. Its cost of goods sold was $8 million, and its average inventory balance was $2,000,000.
a. Calculate the average number of inventory days outstanding for OVHS.
b. The average days of inventory in the industry is 73 days. By how much would OVHS reduce its investment in inventory if it could improve its inventory days to meet the industry average?