The California Fruit Growers' Association is a consortium of fruit farmers on the West Coast for product distribution. The association currently operates 24 warehouses throughout the country. For the most recent calendar year, the statistics on average inventory levels and warehouse throughputs were compiled as given in Table 9-10.

a. What overall turnover ratio is the association able to achieve? Compare the turnover ratio for the three smallest warehouses with the three largest ones in terms of throughput. Suggest why there is a difference.
b. Construct the inventory throughput curve by fitting a straight line to the data by hand or use a simple, linear regression model.
c. Warehouses 1,12, and 23 are to be consolidated into one warehouse. How much inventory would you expect in the one warehouse using the curve from part b?
d. Warehouse 5 is to be expanded into two warehouses. Thirty percent of the throughput will be assigned to one warehouse, and the remainder to the other. How much inventory would you estimate to be in each warehouse using the curve from part b?

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ANNUAL WAREHOUSE THROUCHPUT AVERAGE INVENTORY LEVEL WAREHOUSE $ 21,136,032 16,174,988 78,559,012 17,102,486 88,226,672 40,884,400 43,105,917 47,136,632 24,745,328 57,789,509 16,483,970 26,368,290 $6,812,207 28,368.270 28,356,369 48,697,01 47,412,142 25,832,337 75,266,622 6,403,349 2,586,217 44,503,623 22,617,380 4,230,491 $818,799.258 $2,217,790 2,196,364 9,510,027 2,085,246 11,443,489 5,293,539 6,542,079 5,722,640 2,641,138 6,403,076 1,991,016 2,719,330 $1,241,921 3,473,799 4,166,288 5,449,058 5,412,573 3,599,421 7,523,846 1,009,402 10 12 13 14 15 16 17 18 19 20 21 504,355 2,580,183 3,001,390 23 24 Totals 796,669 97,524,639 Table 9-10 California Frult Growers' Association's Inventory Versus Throughput Statistics