Question
The following table shows financial data (year 2019) for Dirt Cheap Wholesale and Kwiki-Mart, two US retailers: Dirt Cheap Wholesale Kwiki-Mart Stores Inventories ($millions) 5293
The following table shows financial data (year 2019) for Dirt Cheap Wholesale and Kwiki-Mart, two US retailers:
Dirt Cheap Wholesale | Kwiki-Mart Stores | |
Inventories ($millions) | 5293 | 41525 |
Sales (net $millions) | 59158 | 396050 |
COGS ($ millions) | 51986 | 332418 |
Assume that both companies have an average annual holding cost rate of 15%, and stores operate 365 days per year.
How much lower is, on average, the inventory cost for Dirt Cheap compared to Kwiki-Mart of a household cleaner valued at $4 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.
(Report your answer in $ to three decimal places.)
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