Company 1 and company 2 are competitors in the same industry. Company 1 has an inventory turnover of 5 and company 2 has an inventory turnover of 4.

a. Which company is more effective at managing its inventory? Why? (explain)

b..What is the danger of having too high of an inventory turnover?

c. What is the danger of having too low an inventory turnover?

d. How many days on average does each company replenish its inventory?

Company 1:

Company 2: