Jasper Furnishings has $300 million in sales. The companyexpects that its sales will increase 12% this year. Jasper’s CFO uses a simple linearregression to forecast the company’s inventory level for a given level of projected sales.On the basis of recent history, the estimated relationship between inventories and sales (inmillions of dollars) is as follows: Inventories =$25 + 0.125(Sales)Given the estimated sales forecast and the estimated relationship between inventories andsales, what are your forecasts of the company’s year-end inventory level and its inventoryturnover ratio?
Unitary Method
The word “unitary” comes from the word “unit”, which means a single and complete entity. In this method, we find the value of a unit product from the given number of products, and then we solve for the other number of products.
Speed, Time, and Distance
Imagine you and 3 of your friends are planning to go to the playground at 6 in the evening. Your house is one mile away from the playground and one of your friends named Jim must start at 5 pm to reach the playground by walk. The other two friends are 3 miles away.
Profit and Loss
The amount earned or lost on the sale of one or more items is referred to as the profit or loss on that item.
Units and Measurements
Measurements and comparisons are the foundation of science and engineering. We, therefore, need rules that tell us how things are measured and compared. For these measurements and comparisons, we perform certain experiments, and we will need the experiments to set up the devices.
Jasper Furnishings has $300 million in sales. The company
expects that its sales will increase 12% this year. Jasper’s CFO uses a simple linear
regression to forecast the company’s inventory level for a given level of projected sales.
On the basis of recent history, the estimated relationship between inventories and sales (in
millions of dollars) is as follows:
Inventories =$25 + 0.125(Sales)
Given the estimated sales forecast and the estimated relationship between inventories and
sales, what are your forecasts of the company’s year-end inventory level and its inventory
turnover ratio?
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