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: QUARTER 1 (JANUARY QUARTER 2 (APRIL. THROUGH MARCH) THROUGH JUNE) SEPTEMBER) QUARTER 3 QUARTER 4 (JULY THROUGH (OCTOBER THROUGH DECEMBER) Sales (total quarter): United States 300 350 405 375 Canada 75 30 60 33 75 20 70 15 Europe Cost of goods 280 295 340 350
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: QUARTER 1 (JANUARY QUARTER 2 (APRIL. THROUGH MARCH) THROUGH JUNE) SEPTEMBER) QUARTER 3 QUARTER 4 (JULY THROUGH (OCTOBER THROUGH DECEMBER) Sales (total quarter): United States 300 350 405 375 Canada 75 30 60 33 75 20 70 15 Europe Cost of goods 280 295 340 350
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
What is the average inventory turnover for the firm?

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:
QUARTER 1
(JANUARY
THROUGH MARCH) THROUGH JUNE) SEPTEMBER)
QUARTER 2
(APRIL
QUARTER 3
QUARTER 4
(JULY THROUOH (OCTOBER THROUGH
DECEMBER)
Sales (total quarter):
United States
350
300
75
405
75
375
70
Canada
Europe
60
30
33
20
15
Cost of goods
sold (total quarter)
280
295
340
350
Raw materials at
50
40
55
60
the Louisville
plant (end-of-quarter)
Work-in-process
100
105
120
150
and finished
goods at the
Louisville plant
(end-of-quarter)
Distribution center
Inventory (end-of-quarter):
United States
27
25
10
23
15
30
Canada
11
16
Europe
4
5
5
All amounts in millions of U.S. dollars.
a. What is the average inventory turnover for the firm?
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