..ooo MetroPCS 11:40 PM ezto.mheducation.com Question 4 (of 4 Problem 13-17 The
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..ooo MetroPCS 11:40 PM ezto.mheducation.com Question 4 (of 4 Problem 13-17 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: Sales (otal Europe Cost off goods sold (otal quaner) Raw materials at the Loulsville plant Distribution center inventory a. What is the average inventory turnover for the firm? (Round your answer to 3 decimal places.) Average inventory turnover b. If you were given the assignment to increase inventory turnover, what would you focus on? OReduce the of inventory or neduce O Reduce the ol inventory or 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 Weeks of supply your answer to 2 decimal places.)Explanation / Answer
Answer:- Cost of goods sold = 433+431+560+529=1953
Raw Material =75+49+67+75 = 266
WIP and Finished goods =165+194+124+256=739
Distribution inventory = 47+16+8 +52+19+5+26+16+8+55+24+7=283 ( digits are very small in picture so kindly check the correctness of digits)
Therefore, Average aggregate inventory value = 266+739+283 =1033
Average inventory turnover = 1953/1033=1.89
Answer:- the main focus should be on average aggregate inventory value rather than focusing on the cost of goods sold. As it is quite easy to control average aggregate inventory value by controlling the number of distribution centers or work in process.
Answer:- Weeks of supply of raw material =(266+500)/1953*52 =20.39
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