Q$2\mathrm{.}9($Major U$.$S$.$ Retailers$)$ The following table shows financial data $($year $2004)$ for Costco

Wholesale and Wal$-$Mart, two major U$.$S$.$ retailers.

Assume that both companies have an average annual holding cost rate of $30$ percent $($i$.$e$.,$ it costs

both retailers $$3$ to hold an item that they procured for $$10$ for one entire year$).$

a$.$ How many days, on average, does a product stay in Costco's inventory before it is sold?

Assume that stores are operated $365$ days a year.

b$.$ How much lower is$,$ on average, the inventory cost for Costco compared to Wal$-$Mart of a

household cleaner valued at $$5$ COGS? Assume that the unit cost of the household cleaner is the

same for both companies and that the price and the inventory turns of an item are independent.

Optional:

To give you some flexibility, the following problems are NOT required for submission. But,

please do them when you get time. It will be helpful.

Q$2\mathrm{.}10($McDonald$\text{'}$s$)$ The following figures are taken from the $2003$ financial statements of

McDonald's and Wendy's$\mathrm{.}1$ Figures are in million dollars.