Arrow Distributing Corp likes to track inventory by using weeks of supply as wel

Question

Arrow Distributing Corp likes to track inventory by using weeks of supply as well as by inventory turnover Arrow Distributing Cor Net Revenue Cost of sales Inventory Total assets $16,200 $14,240 $930 $8 340 a) What is its weeks of supply? weeks (round your response to two decimal places b) What percent of Arrow's assets are committed to inventory? % enter your response as a percentage rounded two decimal places) c) What is Arrow's inventory turnover? times per year round your response to two decimal places d) Suppose a manufacturer has an inventory turnover of 135 times per year Arrow's supply chain performance relative to the manufacturers, as measured by inventory turnover, is r in each of the answer boxes

Explanation / Answer

There are 52 weeks in a year

a. Weeks of supply = Investment on inventory / (Weekly cost of goods /52)

Putting the values = 930 /(14240/52) = 930/273.84 = 3.39

b. Percentage invested in inventory = (Total inventory investment/ Total Asset)*100

Putting values:

= 930/8340 = 0.1115 * 100 = 11.15%

c. Inventory turnover = Cost of goods/ Inventory investment

Putting values:

= 14240/930 = 15.31

d. Arrow inventory turnover is 15.31 is better than manufacture who has turnover of 13.5

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