•• 11.5 inventory turnover to those of industry leaders, who have turno- ver of about 13 times per year and 8% of their assets invested in inventory. a) What is Baker's inventory turnover? b) What is Baker's percent of assets committed to inventory? c) How does Baker's performance compare to the industry leaders? Baker Mfg. Inc. (see Table 11.9) wishes to compare its TABLE 11.9 For Problems 11.5 and 11.6 ARROW DISTRIBUTING CORP. Net revenue $16,500 Cost of sales $13,500 $ 1,000 $ 8,600 Inventory Total assets BAKER MFG. INC. Net revenue $27,500 Cost of sales $21,500 Inventory $ 1,250 Total assets $16,600

Practical Management Science
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Author:WINSTON, Wayne L.
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### Measuring Supply Chain Performance

#### Problem 11.5

**Baker Mfg. Inc.** is evaluating its inventory turnover compared to industry leaders, who achieve about 13 turnovers per year and allocate 8% of their assets to inventory.

- **Questions:**
  a) What is Baker's inventory turnover?
  b) What percentage of Baker’s assets are committed to inventory?
  c) How does Baker's performance compare to the industry leaders?

#### Table 11.9

This table compares key financial metrics of Arrow Distributing Corp. and Baker Mfg. Inc. relevant for inventory turnover analysis.

- **Arrow Distributing Corp.:**
  - Net Revenue: $16,500
  - Cost of Sales: $13,500
  - Inventory: $1,000
  - Total Assets: $8,600

- **Baker Mfg. Inc.:**
  - Net Revenue: $27,500
  - Cost of Sales: $21,500
  - Inventory: $1,250
  - Total Assets: $16,600

These figures are used to calculate inventory turnover and asset commitment to inventory for Baker Mfg. Inc. in comparison to industry standards.
Transcribed Image Text:### Measuring Supply Chain Performance #### Problem 11.5 **Baker Mfg. Inc.** is evaluating its inventory turnover compared to industry leaders, who achieve about 13 turnovers per year and allocate 8% of their assets to inventory. - **Questions:** a) What is Baker's inventory turnover? b) What percentage of Baker’s assets are committed to inventory? c) How does Baker's performance compare to the industry leaders? #### Table 11.9 This table compares key financial metrics of Arrow Distributing Corp. and Baker Mfg. Inc. relevant for inventory turnover analysis. - **Arrow Distributing Corp.:** - Net Revenue: $16,500 - Cost of Sales: $13,500 - Inventory: $1,000 - Total Assets: $8,600 - **Baker Mfg. Inc.:** - Net Revenue: $27,500 - Cost of Sales: $21,500 - Inventory: $1,250 - Total Assets: $16,600 These figures are used to calculate inventory turnover and asset commitment to inventory for Baker Mfg. Inc. in comparison to industry standards.
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