1 Acting as an outside consultant, what would you recommend that Pepe do? Given the data in the case, perform a financial analysis to evaluate the alternatives that you have identified. (Assume that the new inventory could be valued at six weeks' worth of the yearly cost of sales. Use a 30 percent inventory carrying cost rate.) Calculate a payback period for each alternative. Pepe began to produce and sell denim jeans in the early 1970s in the United Kingdom and has achieved enomous growth. Pepe's success was the result of a unique approach in a product market dominated by strong brands and limited variety. Pepe presented a range of jeans styles that offered a better fit than traditional 5-pocket Westem jeans (such as those made by Levi Strauss in the United States)-particularly for female customers. The Pepe range of basic styles is modified each season, but each style keeps its identity with a slightly whimsical name featured prominently on the jeans and on the point-of-sale material. Variations such as modified washes, leather trim, and even designer wear marks are applied to respond to changing fashion trends. To leam more about Pepe and its products, visit its Web site at http://www.pepejeans.com