Two distributors each start out selling a single brand of engine and both have annual sales = $100,000 after 1 year. Over the next 2 years, both grow their annual sales = $1M. The first grows sales for the same single brand of engine. The second adds 9 other brands of motors and achieves $100,000 in sales for each brand.

1. Explain once they have reached $1,000,000 in sales, which of the two distributors would maintain higher inventories?

2. By growing, the annual turns for the first distributor (explain and circle one)

Increase         Remain unchanged or Decrease