The U.S. Airfilter company has hired you as a supply chain consultant. The compa
ID: 367876 • Letter: T
Question
The U.S. Airfilter company has hired you as a supply chain consultant. The company makes air filters for residential heating and air-conditioning systems. These filters are made in a single plant located in Louisville, Kentucky, in the United States. They are distributed to retailers through wholesale centers in 100 locations in the United States, Canada, and Europe. You have collected the following data relating to the value of inventory in the U.S. Airfilter supply chain:
c. The company reported that it used $500M worth of raw material during the year. On average, how many weeks of supply of raw material are on hand at the factory? (Round your answer to 2 decimal places.)
Weeks of supply
QUARTER 1(JANUARY
THROUGH
MARCH) QUARTER 2
(APRIL THROUGH
JUNE) QUARTER 3
(JULY
THROUGH
SEPTEMBER) QUARTER 4
(OCTOBER
THROUGH
DECEMBER) All amounts in millions of U.S. dollars Sales (total quarter): United states 300 350 405 375 Canada 75 60 75 70 Europe 30 33 20 15 Cost of goods sold (total quarter) 280 295 340 350 Raw materials at the Louisville plant
(end-of-quarter) 50 40 55 60 Work-in-process and finished goods at the Louisville plant (end-of-quarter) 100 105 120 150 Distribution center inventory
(end-of-quarter): United states 25 27 23 30 Canada 10 11 15 16 Europe 5 4 5 5
Explanation / Answer
Total cost of goods sold = 280+295+140+350= 1065
Total raw materials= 50+40+55+60= 205
Weeks of supply of raw materials= (205+500)/1065 *52
= 34.42
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