Problem 16-17 (Algo) The U.S. Airfilter company has hired you as a supply chain consultant. The company makes air filters for residential heating and air-conditioning systems. These filters are made in a single plant located in Louisville, Kentucky, in the United States. They are distributed to retailers through wholesale centers in 100 locations in the United States, Canada, and Europe. You have collected the following data relating to the value of inventory in the U.S. Airfilter supply chain: QUARTER 1 (JANUARY THROUGH MARCH) QUARTER 2 (APRIL THROUGH JUNE) QUARTER 3 (JULY THROUGH SEPTEMBER) QUARTER 4 (OCTOBER THROUGH DECEMBER) All amounts in millions of U.S. dollars Sales (total quarter): United states 414 402 520 514 Canada 135 96 126 117 Europe 41 34 42 25 Cost of goods sold (total quarter) 384 347 453 434 Raw materials at the Louisville plant (end-of-quarter) 73 62 67 72 Work-in-process and finished goods at the Louisville plant (end-of-quarter) 109 159 124 222 Distribution center inventory (end-of-quarter): United states 58 31 34 38 Canada 17 19 22 20 Europe 6 4 9 6 ________________________________________ a. What is the average inventory turnover for the firm? (Round your answer to 3 decimal places.) b. If you were given the assignment to increase inventory turnover, what would you focus on? multiple choice • Increase the amount of inventory or increase sales or both • Reduce the amount of inventory or reduce sales or both • Reduce the amount of inventory or increase sales or both c. The company reported that it used $500M worth of raw material during the year. On average, how many weeks of supply of raw material are on hand at the factory? (Round your answer to 2 decimal places.) Weeks of raw material supply
Problem 16-17 (Algo)
The U.S. Airfilter company has hired you as a supply chain consultant. The company makes air filters for residential heating and air-conditioning systems. These filters are made in a single plant located in Louisville, Kentucky, in the United States. They are distributed to retailers through wholesale centers in 100 locations in the United States, Canada, and Europe. You have collected the following data relating to the value of inventory in the U.S. Airfilter supply chain:
QUARTER 1
(JANUARY
THROUGH
MARCH) QUARTER 2
(APRIL THROUGH
JUNE) QUARTER 3
(JULY
THROUGH
SEPTEMBER) QUARTER 4
(OCTOBER
THROUGH
DECEMBER)
All amounts in millions of U.S. dollars
Sales (total quarter):
United states 414 402 520 514
Canada 135 96 126 117
Europe 41 34 42 25
Cost of goods sold (total quarter) 384 347 453 434
Raw materials at the Louisville plant
(end-of-quarter) 73 62 67 72
Work-in-process and finished goods at
the Louisville plant (end-of-quarter) 109 159 124 222
Distribution center inventory
(end-of-quarter):
United states 58 31 34 38
Canada 17 19 22 20
Europe 6 4 9 6
________________________________________
a. What is the average inventory turnover for the firm? (Round your answer to 3 decimal places.)
b. If you were given the assignment to increase inventory turnover, what would you focus on?
multiple choice
• Increase the amount of inventory or increase sales or both
• Reduce the amount of inventory or reduce sales or both
• Reduce the amount of inventory or increase sales or both
c. The company reported that it used $500M worth of raw material during the year. On average, how many weeks of supply of raw material are on hand at the factory? (Round your answer to 2 decimal places.)
Weeks of raw material supply
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