Genuine Reproductions (GR) plans on increasing next years sales by 20 percent while maintaining its same average
Question:
Genuine Reproductions (GR) plans on increasing next year’s sales by 20 percent while maintaining its same average inventory in dollars of $250,000.
(a) Calculate the expected inventory turnover for next year.
(b) Calculate the expected weeks of supply.
Step by Step Answer:
a Inventory Turnover 360000025000...View the full answer
Related Video
Inventory turnover is a key metric that helps businesses evaluate the efficiency of their operations. A high turnover ratio is generally considered positive, indicating that the company is effectively selling its inventory and making efficient use of its resources. On the other hand, a low turnover ratio may indicate issues such as overstocking or slow sales and may require further examination to identify and address the underlying causes. Businesses use this ratio to make decisions about inventory levels, production schedules, and pricing strategies. It also helps businesses to identify areas where they may need to make improvements, such as reducing lead times for production or optimizing sales and marketing efforts. Additionally, inventory turnover is used by investors and analysts as a key performance indicator to evaluate the financial health and growth potential of a company.
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