Question: 1 . A firm has an average 1 2 - week lead time for work - in - process, and annual cost of goods sold

1. A firm has an average 12-week lead time for work-in-process, and annual cost of goods sold is $10 million. Assuming the firm operates 50 weeks per year and WIP =(1)/(2) of final inventory value:
a. What is the value of the work-in-process?
b. If the lead time could be reduced to 10 weeks, and the annual cost of carrying inventory is 10% of the inventory value, what would be the annual savings?

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