Improvement opportunity: $\{$In this section, provide your analysis concerning the cost impact of improving inventory management. First, determine which company performs inventory management better and discuss your findings supporting your answer with evidence from your calculations above. You can analyze the cost impact by deciding how much additional inventory holding a company incurs due to the different inventory carried. You are studying the implications if the company performing poorer in inventory management could achieve the same Days in Inventory as the company performing better $($the same cost of sales but reduced inventory to support the sales$).$ Assume a $25\%$ carrying cost. In this section, discuss how cash flow can be impacted and assess the improvement opportunity. Perform the calculations below and provide your assessment$\}$

To evaluate the improvement opportunity, you must calculate the following:

New Inventory Level $=2022$ Days in Inventory X $2022$ daily COGS

Reduction in inventory $=2022$ Inventory $$ New Inventory Level calculated above

Annual savings $=$ Inventory reduction calculated above x carrying cost rate $($assuming a $25\%$ carrying cost$).$ Express the annual savings in terms of trillions. SHOW ALL CALCULATIONS IN THE TABLE BELOW$\}$

Performance Savings Analysis

New Inventory Level $99\mathrm{.}99$ X $9999\mathrm{.}99=99999\mathrm{.}99$

Reduction in Inventory $9999999999\mathrm{.}99=99999\mathrm{.}99$

Annual Savings $99999,99$ X carrying cost $=$ $$999999\mathrm{.}99$