Assume the chart is made from this data $($I had to estimate$)$:

Retailer

Annual Inventory Turns

Gross Margin Percentage

Macy's

$3\mathrm{.}5$

$40\mathrm{.}5$

Kohl's

$3\mathrm{.}5$

$37\mathrm{.}0$

Lowe's

$4\mathrm{.}0$

$34\mathrm{.}5$

Home Depot

$4\mathrm{.}5$

$35\mathrm{.}0$

Sears

$4\mathrm{.}0$

$27\mathrm{.}0$

Target

$7\mathrm{.}5$

$31\mathrm{.}5$

Ace Hardware

$7\mathrm{.}0$

$12\mathrm{.}5$

Walmart

$8\mathrm{.}5$

$25\mathrm{.}0$

Costco

$12\mathrm{.}0$

$12\mathrm{.}5$

Kroger

$12\mathrm{.}0$

$20\mathrm{.}5$

Safeway

$13\mathrm{.}0$

$27\mathrm{.}0$

SuperValu

$17\mathrm{.}5$

$14\mathrm{.}0$

Whole Foods

$20\mathrm{.}5$

$36\mathrm{.}5$

Your boss, Betty Lee asks:

We are looking at these organizations and the way they convert inventory turns into gross margin. We want to know what the outliers are doing differently.

First, what is a general relationship that you can draw between Gross Margin Percentage and Inventory Turns $($Can you draw a line on this graph$)?$

What is your explanation for that conclusion? Why do you think there is a general trend?

Identify at least one retailer that is "off the line". How do you think that these retailers are successful doing something different than other retailers?

Betty Lee, Sr$.$ Director Marketing and Distribution