Contemporary Mathematics for Business & Consumers 8th Edition by Robert Brechner,Geroge Bergeman

Exercise 24

Summit Supply is an electrical parts wholesaler. Last year its average inventory at cost was $132,500 and its cost of goods sold was $690,400. The inventory turnover rate published for a business of this size is 5.5 times.
a. Calculate the actual inventory turnover rate at cost for Summit Supply. Round to the nearest tenth.
b. If the turnover rate is below the industry average of 5.5 times, calculate the target average inventory needed to match the industry standard.