6 As mentioned above, this question tests the concept of inventory turns. The m ore often a company turns its inventory, the less working capital is required for financ ing the operations. It is important to recognize that inventory turns are based on the costs of goods sold (COGS, the $100 for procuring the painting), not based on reve nue (t he $400 selling price of the painting). In this que st ion, the inventory turns are given (1.5). To answer t he question, one must go from revenue to CO GS and t hen app ly t he inventory turns to obtain the required working capital. So, what did Chat GPT do? ANSWER 2 To achieve an annual revenue of $3,000,000, the founders need to sell $3,000,000 / 4 = $750,000 worth of paintings per year. Since they expect to turn their inventory 1.5 times per year, they need to have $750,000 / 1.5 = $500,000 worth of invent ory at any given time. Therefore, the founders should expect their operation to require $500,000 worth of inventory. Sh ort and sweet! At some other occasions I fed this question to Chat GPT , I also was informed that this is just the working capital needed for the inventory and that a dditi ona l wo rking capital might be needed for other aspect s of the business. Either way – a second A+ is in order. COMPLEX PROCESS ANALYSIS The first question (the Circored proc ess) involved a process with a single input (iron ore fines) and a single output (briquets). Many processes, however, involve multiple flows. In the busine ss sc hool community, the most commonly used example of teaching such flow problem s with a product mix is the Harvard Business Sc hool case study “N at io nal Cranberry” (Miller and Olsen 1974). I simplified the 11 -page case study to the following :