Golf, Inc., and Swing, Inc., are close competitors. Last year, both had the same

Question

Golf, Inc., and Swing, Inc., are close competitors. Last year, both had the same amount of cost of goods sold, but Golf turned its inventory 5 times during the year while Swing turned its inventory every 65 days. Which one of the following statements is true if the objective of both firms is to keep average inventory as low as possible?
a. Golf did a better job since its inventory turnover is lower.
b. Swing did a better job since its days' sales in inventory is lower.
c. Golf did a better job since its days' sales in inventory is lower.
d. Swing did a better job since its inventory turnover is lower.

Explanation / Answer

B) Swing did a better job since its days' sales in inventory is lower.

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