Unit # 7 Inventory Questions Always include units with answer and two decimal places. ROP ddLT + SS Inventory Tums - Cost of Goods Sold/ Inventory Value Weeks Supply = Inventory Value / Average Weekly Cost of Goods Sold OR=#of weeks/turns Candle Inventory Question would be worth 10 marks) You have been hired to look at the inventory control practices of a small distributor that sells 400 cases of candles per day and they are open every day 51 weeks of the year. They are proud that they are the only Canadian distributor for these wonderful candles. They know the holding cost is $25 per case and each time they order it costs them $110. The lead time from the supplier is 2 weeks. They usually carry $1,487,500 in stock and each case costs $125 with a selling price of $250. They have chosen to carry an extra 250 cases... just in case. They have asked you to determine the following: a) What is the current Inventory Turns and Weeks Supply as of today? (2+1 marks) b) They use perpetual inventory counting. At what inventory level should they reorder cases of candles? (2) c) What quantity should they reorder each time? (2) d) Do you think their Inventory Turns/Weeks Supply is ideal for the profitability of the business? Explain. (1) e) What do you recommend and how much could be saved or should be spent to improve the inventory control management? What are your specific recommendations? (2 marks) (HINT: USE NUMBERS!!)