1. The Eagle Machine Company averaged $2 million in inventory last year, and the cost of...
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1. The Eagle Machine Company averaged $2 million in inventory last year, and the cost of goods sold was $10 million. The table below shows the breakout of raw materials, work-in-process, and finished goods inventories. The best inventory turnover in the company's industry is six turns per year. a. If the company has 52 business weeks per year, how many weeks of supply are held in inventory? b. What was the inventory turnover? c. What should the company do? Type of inventory Raw materials Work in progress Finished goods Item number 1 2 3 4 5 6 7 68 9 10 11 12 13 14 15 Average level 1400 1000 400 2400 800 320 160 280 240 400 60 40 50 20 40 Unit value $50 $32 $60 $10 $15 $700 $900 $750 $800 $1000 $2000 $3500 $2800 $5000 $4200 Total Total value $70000 $32000 $24000 $224000 $144000 $210000 $120000 $140000 $140000 2. A recent accounting statement showed total inventories (raw materials + WIP + finished goods) to be $6,821,000. This year's "cost of goods sold" is $19.2 million. The company operates 52 weeks per year. How many weeks of supply are being held? What is the inventory turnover? 1. The Eagle Machine Company averaged $2 million in inventory last year, and the cost of goods sold was $10 million. The table below shows the breakout of raw materials, work-in-process, and finished goods inventories. The best inventory turnover in the company's industry is six turns per year. a. If the company has 52 business weeks per year, how many weeks of supply are held in inventory? b. What was the inventory turnover? c. What should the company do? Type of inventory Raw materials Work in progress Finished goods Item number 1 2 3 4 5 6 7 68 9 10 11 12 13 14 15 Average level 1400 1000 400 2400 800 320 160 280 240 400 60 40 50 20 40 Unit value $50 $32 $60 $10 $15 $700 $900 $750 $800 $1000 $2000 $3500 $2800 $5000 $4200 Total Total value $70000 $32000 $24000 $224000 $144000 $210000 $120000 $140000 $140000 2. A recent accounting statement showed total inventories (raw materials + WIP + finished goods) to be $6,821,000. This year's "cost of goods sold" is $19.2 million. The company operates 52 weeks per year. How many weeks of supply are being held? What is the inventory turnover?
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Related Book For
Operations management processes and supply chain
ISBN: 978-0136065760
9th edition
Authors: Lee J Krajewski, Larry P Ritzman, Manoj K Malhotra
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