Unformatted text preview: uld cost HS $5 to hold one Lava Lamp for one year. Based on similar items, HS also estimates that it would need to hold about 4.5 months‐of‐supply of this lamp and it would sell about a total of 25 units per year. If HS adds this item to the assortment and if its estimates are correct, what would be the holding cost per lamp sold? Q28 Consider two home appliance retailers, A and B. Retailer A turned its inventory 8.1 times in 2008 whereas Retailer B turned its inventory 6.3 times in 2008. Interestingly, their 2008 sales were nearly identical ($15.6b) and their ending inventory was nearly identical ($1.4b). Which of the following statements is most likely true regarding their gross margin (recall, gross margin = sales ‐ COGs)? a) Retailer A has the higher gross margin because it has the higher inventory turns. b) Retailer B has the higher gross margin because it has the lower inventory turns. c) They have the same gross margin because their sales are identical (and it doesn’t matter that their inventory is the same)....
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- Spring '08
- gross margin, editor, LHS, Comfy Shoes