1. Andrew Manufacturing held an average inventory of $1.2 million (raw materials, work-in-process, finished goods) last year....
Question:
1. Andrew Manufacturing held an average inventory of $1.2 million (raw materials, work-in-process, finished goods) last year. Its sales were $8.2 million, and its cost of goods sold was $5.0 million. The firm operates 295 days a year. What is the inventory days' supply? Do not round intermediate calculations. Round your answer to one decimal place.
A. Inventory days' supply (IDS): ___________ days
B. What target inventory level is necessary to reach a 25- and 15-day inventory days' supply during the next two years? Do not round intermediate calculations. Round your answers to the nearest dollar.
Target inventory level (25-day): $_________
Target inventory level (15-day): $ _________
2. Based on the following information, how many days of supply of inventory is the firm holding (assume 260 days of operation per year)? Do not round intermediate calculations. Round your answer to one decimal place.
Sales | $8,500,000 |
Cost of goods sold | $7,020,000 |
Gross profit | $1,480,000 |
Overhead costs | $500,000 |
Net profit | $980,000 |
Total inventory | $2,700,000 |
Fixed assets | $3,000,000 |
Long-term debt | $3,000,000 |
A. Inventory days' supply: __________ days' supply
Interpret your answer if the industry average inventory days' supply is 20 days. Round your answer to one decimal place.
B. If the industry average days' supply is 20 days and this firm's IDS is__________ times more, they -Select-havehave noItem 3 inventory management problems.
3. What are order cycle costs if annual demand is 13,500 units, the order quantity is 1,900 units, and annual order cost is $20? What if the order size changes to 950 units or 13,500 units? Round your answers to the nearest cent.
A. If the order quantity is 1,900 units, the order cycle costs are $__________ .
B. If the order quantity is 950 units, the order cycle costs are $_________ .
C. If the order quantity is 13,500 units, the order cycle costs are $__________
OM6 operations supply chain management
ISBN: 978-1305664791
6th edition
Authors: David Alan Collier, James R. Evans