In a retail store the stock turnover rate of an item is the number of times that the average inventory of the item needs to be replaced as a result of sales in a given time period. It is an important measure of sales demand and merchandising efficiency. Suppose a retail clothing store maintains an average inventory of 50 shirts of a particular brand.
(a) Suppose that the clothing store sells 250 shirts of that brand each year. How many orders of 50 shirts will be needed to replace the items sold?
orders
(b) What is the annual stock turnover rate for that brand of shirt if the store sells 250 shirts each year?
times/yr
(c) What would be the annual stock turnover rate if 550 shirts were sold?
times/yr
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