Question: (Apparel Retailing: flow analysis) [15%] . A large catalog retailer of fashion apparel reported $100,000,000 in revenues over the last year. On average, over the same year, the company had $5,000,000 worth of inventory in their warehouses. Assume that units in inventory are valued based on cost of goods sold (COGS) and that the retailer has a 100 percent markup (i.e., price=2*cost) on all products.

1. How many times each year does the retailer turn its inventory?

b. On average, what is the inventory carrying cost for a $30 (COGS) item? The company uses a 40 percent per year cost of inventory. That is, for the hypothetical case that one item of $100 COGS would sit exactly one year in inventory, the company charges itself a $40 inventory carrying cost. You may assume that inventory turns are independent of the price.

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