Question: the following table shows financial data (year 2009) for two US retailers: Save-A-Lot Retailers and Wallys Mart. Assume that both companies have an average annual

the following table shows financial data (year 2009) for two US retailers: Save-A-Lot Retailers and Wallys Mart.

Assume that both companies have an average annual holding cost rate of 20% (i.e. it costs both retailers $2 to hold an item for one entire year that they procured for $10).

How much lower, on average, is the inventory cost for Save-A-Lot compared to Wallys Mart of a household cleaner valued at $50 COGS? Give your answer in terms of dollars. 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.

Inventories ($MM) Sales (net SMM) COGS ($MM) Save-A-Lot 5,743 59,217 53,962 Wally's Mart 40,694 397,206 316,606

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