Question

A pharmacy has purchased 550 products over a period of 3 months. If their average inventory was 235 products in a 3-month period, their inventory turnover rate for this period is

a. 1.56
b. 3.14
c. 2.34
d. 4.75

Answer 1

The inventory turnover rate for the pharmacy over a 3-month period is calculated by dividing the Cost of Goods Sold (COGS), which is 550 products, by the average inventory, which is 235 products. The answer is 2.34, representing the inventory turnover rate.

Step-by-step explanation:

The question asks to calculate the inventory turnover rate for a pharmacy over a 3-month period. The formula to calculate inventory turnover rate is:

Inventory Turnover Rate = Cost of Goods Sold (COGS) / Average Inventory

We are given that the pharmacy has purchased 550 products which can be assumed to be the Cost of Goods Sold (COGS), and their average inventory was 235 products.

Using the provided information:

Inventory Turnover Rate = 550 / 235 = 2.34

Thus, the correct answer is c. 2.34, representing the inventory turnover rate for the pharmacy during this period.