A manufacturer of air conditioner compressors is concerned that too much money is tied up in its value chain. Average
a. What is the total flow (process) time of a throughput dollar?
b. What is the average dollar inventory in the value chain?
c. Which of the major stagesraw materials, WIP, finished goods or accounts receivableis the best candidate for freeing up dollars for the air conditioner manufacturer?
d. What is the target level of average accounts receivable inventory if management can reduce the time a dollar spends in accounts receivable inventory (processing and collections) by one-half by improving the accounts receivable process?
e. What else does this flow time analysis problem demonstrate?
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