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 486 81 34 433 75 165 47 16 8 QUARTER 2 (APRIL THROUGH 422 135 JUNE) All amounts in millions of U.S. dollars 40 431 49 194 QUARTER 3 (JULY THROUGH SEPTEMBER) 52 19 5 574 154 41 560 67 124 26 16 QUARTER 4 (OCTOBER THROUGH DECEMBER) 8 540 168 15 529 75 256 55 24 7 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 $606.5M 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 486 81 34 433 75 165 47 16 8 QUARTER 2 (APRIL THROUGH 422 135 JUNE) All amounts in millions of U.S. dollars 40 431 49 194 QUARTER 3 (JULY THROUGH SEPTEMBER) 52 19 5 574 154 41 560 67 124 26 16 QUARTER 4 (OCTOBER THROUGH DECEMBER) 8 540 168 15 529 75 256 55 24 7 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 $606.5M 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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
486
81
34
433
75
165
768
47
16
QUARTER 2
(APRIL THROUGH
422
135
40
431
JUNE)
All amounts in millions of U.S. dollars
49
194
QUARTER 3 (JULY
THROUGH
SEPTEMBER)
52
19
5
574
154
41
560
67
124
668
26
QUARTER 4
(OCTOBER
THROUGH
DECEMBER)
16
540
168
15
529
75
256
5275
24
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 $606.5M 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.
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