A-Mart and B-Mart are two discount chains with sales per store of N10 million per year, each with margins of 20%. The two chains have a total of 100 stores each. Each store achieves, on average, 6 turns of inventory per year. B-Mart sets up an information and transportation system to allow store exchanges based on stockouts as and when necessary. At the end of a year, B- Mart’s stores can achieve 8 turns of inventory per year. Assuming a holding cost of 20%, what annual savings can be attributed to the recent operational changes?

Answer rating: 100% (QA)

To calculate the annual savings attributed to the operational changes we need to compare the holding ... View the full answer