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inventory turnover rates

1. Select a product or service. Then select three different organizations that provide your selected product or service and compare the prices associated with your selected product or service. What is the difference between the prices among the different organizations? What is the rationale for this difference?

2. Sometimes the price of the exact same product or service can vary. Location is a factor which enables a company to demand a higher price from their customers. For example, the price of a gallon of gasoline or milk can vary depending on where the service station or store is located.

What are other factors that influence price setting?

3. Wal-Mart should always win the price war over their competitors because they have the advantage of purchasing in mass quantity. Another thing retailers and wholesalers need to monitor closely is their inventory turnover rate. Inventory turnover is the cost of the goods sold divided by the average inventory.

If a company has too low of an inventory turnover rate what would this indicate? If a company has too high of an inventory turnover rate what would this indicate?

Solution Preview

1. Select a product or service. Then select three different organizations that provide your selected product or service and compare the prices associated with your selected product or service. What is the difference between the prices among the different organizations? What is the rationale for this difference?

The selected product is dried olives. The dried olives sold by Penna are prices at $4.30 for 8oz, the dried olives sold by Packit Gourmet is priced at $24.99 for 8oz and the dried olives sold by Rawguru is $55.00 for six 8oz bags. The difference in prices is because of difference in quality for instance, the dried olives being sold by Rawguru are organic and are free of salt. ...

Solution Summary

inventory turnover rates is discussed very comprehensively in this explanation..

$2.19