Please show all work for solutions.

1.The pizza parlor can prepare and bake a pizza in 15 minutes. There are, on average 8 pizzas in preparation or baking in the kitchen. How many customers per hour can the pizza parlor serve (R)? Assume each customer orders only 1 pizza. (Remember: 15 minutes is 0.25 hours)

Hint: T = 15 min, I = 8 pizzas

a) 32

b) 8

c) 15

d) 120

2. A high-street jewelry store has the following values on its annual reports:

Cost of Goods Sold = $1.2 million

Average Inventory = $1.4 million

What is average length of time a piece of jewelry stays in the store (years) for this high-street jewelry store (T)?

Hint: COGS is the Rate (R): $/year

a) 0.86

b) 1.17

c) 1.3

d) 1.4

3. An online (internet only) jewelry store has the following values on its annual reports:

Cost of Goods Sold = $240,000

Average Inventory = $20,000

What is the average length of time a piece of jewelry stays in the store before it is sold (years) for this online jewelry store?

a) 0.08

b) 12

c) 120

d) 20

2/2

4. A high-street jewelry store has the following values on its annual reports:

Cost of Goods Sold = $1.2 million

Average Inventory = $1.4 million

What are the inventory turns for this jewelry store?

(Remember, Inventory Turns = 1/T)

a) 0.86

b) 1.17

c) 1.2

d) 1.4

5. An online (internet only) jewelry store has the following values on its annual reports:

Cost of Goods Sold = $240,000

Average Inventory = $20,000

What are the inventory turns for this jewelry store?

a) 0.08

b) 12

c) 120

d) 20

6. For these jewelry stores (both high street and online), if the cost of carrying inventory is 30% of the average inventory, what will the savings be comparing the online store to the high street store?

(Use the values for average inventory from the previous two questions.)

a) $1.38 million

b) $414,000

c) $960,000

d) $220,000