Review the chapter's opening feature highlighting Brad Gillis and Ben Friedman and their company, Homegrown Sustainable Sandwich Shop on page 251 of the textbook.Assume that Homegrown consistently maintains an inventory level of $30,000, meaning that its average and ending inventory levels are the same.Also assume its annual cost of sales is $120,000.To cut costs, Brad and Ben propose to slash inventory to a constant level of $15,000 with no impact on cost of sales.They plan to work with suppliers to get quicker deliveries and to order smaller quantities more often.

Under the current conditions, inventory turnover is $120,000/$30,000 = 4 times; and days' sales in inventory is ($30,000/$120,000)/365 = 91.25 days.

Under the proposed conditions inventory turnover is $120,000/$15,000 = 8 times; and days' sales in inventory is ($15,000/$120,000)/365 = 45.63 days.

• Evaluate and comment on the merits of their proposal given the results of the inventory turnover and days' sales in inventory calculations above.Identify any concerns you might have about the proposal.