Inventory Turnover:

Please select your best alternative:

Your client has $1,000,000 and wants to buy product for resale. Which alternative will provide the greatest return on their investment and why.

(1) A group of convenience stores, the average turnover of the bread and milk is 1.7 days, but the margin on the retail price will be only 2% that $0.02 dollar of sale.

(2) A CATERPILLAR tractor sales outlet with an average inventory turn is 0.65 times per year, and can provide much greater margins, they are about 35% that $0.35 per sales dollar.