U.S. Airfilter 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: Sales (total quarter): United states Canada Europe Cost of goods sold (total quarter) Raw materials at the Louisville plant (end-of- quarter) Work-in-process and finished goods at the Louisville plant (end-of quarter) Distribution center inventory (end-of-quarter): United states Canada Europe a. What is the average inventory turnover for the firm? Note: Round your answer to 3 decimal places. Average inventory turnover QUARTER 1 (JANUARY THROUGH MARCH) Weeks of supply 356 130 42 338 93 194 38 14 6 QUARTER 2 (APRIL THROUGH 532 127 34 445 JUNE) All amounts in millions of U.S. dollars 49 175 46 20 QUARTER 3 (JULY THROUGH SEPTEMBER) 7 552 116 49 465 79 127 QUARTER 4 (OCTOBER THROUGH DECEMBER) 30 21 11 436 151 24 398 89 176 40 19 6 b. If you were given the assignment to increase inventory turnover, what would you focus on? O Reduce the amount of inventory or increase sales or both O Reduce the amount of inventory or reduce sales or both O Increase the amount of inventory or increase sales or both c. The company reported that it used $531.0M worth of raw material during the year. On average, how many weeks of supply of raw material are on-hand at the factory? Note: Round your answer to 2 decimal places.
U.S. Airfilter 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: Sales (total quarter): United states Canada Europe Cost of goods sold (total quarter) Raw materials at the Louisville plant (end-of- quarter) Work-in-process and finished goods at the Louisville plant (end-of quarter) Distribution center inventory (end-of-quarter): United states Canada Europe a. What is the average inventory turnover for the firm? Note: Round your answer to 3 decimal places. Average inventory turnover QUARTER 1 (JANUARY THROUGH MARCH) Weeks of supply 356 130 42 338 93 194 38 14 6 QUARTER 2 (APRIL THROUGH 532 127 34 445 JUNE) All amounts in millions of U.S. dollars 49 175 46 20 QUARTER 3 (JULY THROUGH SEPTEMBER) 7 552 116 49 465 79 127 QUARTER 4 (OCTOBER THROUGH DECEMBER) 30 21 11 436 151 24 398 89 176 40 19 6 b. If you were given the assignment to increase inventory turnover, what would you focus on? O Reduce the amount of inventory or increase sales or both O Reduce the amount of inventory or reduce sales or both O Increase the amount of inventory or increase sales or both c. The company reported that it used $531.0M worth of raw material during the year. On average, how many weeks of supply of raw material are on-hand at the factory? Note: Round your answer to 2 decimal places.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Transcribed Image Text:U.S. Airfilter 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:
Sales (total quarter):
United states
Canada
Europe
Cost of goods sold (total quarter)
Raw materials at the Louisville plant (end-of-
quarter)
Work-in-process and finished goods at the
Louisville plant (end-of quarter)
Distribution center inventory (end-of-quarter):
United states
Canada
Europe
a. What is the average inventory turnover for the firm?
Note: Round your answer to 3 decimal places.
Average inventory turnover
QUARTER 1
(JANUARY
THROUGH
MARCH)
356
130
42
338
Weeks of supply
93
194
38
00 +
14
6
QUARTER 2
(APRIL THROUGH
532
127
34
445
JUNE)
All amounts in millions of U.S. dollars
49
175
QUARTER 3 (JULY
THROUGH
SEPTEMBER)
46
20
7
552
116
49
465
79
127
30
21
11
b. If you were given the assignment to increase inventory turnover, what would you focus on?
O Reduce the amount of inventory or increase sales or both
O Reduce the amount of inventory or reduce sales or both
O Increase the amount of inventory or increase sales or both
QUARTER 4
(OCTOBER
THROUGH
DECEMBER)
436
151
24
398
89
176
40
19
6
used $531.0M worth of raw material during the year. On average, how many weeks of supply of raw
c. The company reported that
material are on-hand at the factory?
Note: Round your answer to 2 decimal places.
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