Below the data related to the value of inventory in a company (all values in mil

Question

Below the data related to the value of inventory in a company (all values in millions US dollars):

                                                                       Quarter 1                     Quarter 2                   Quarter 3                Quarter 4

COGS --                                                                300                              315                           360                        370

Raw materials                                                      60                                50                             65                          70

Work-in-process and finished goods                     110    115                           130                        160

Distribution Center inventory                                 40                                  42                             43                          51

Question:The company indicated that it used $500 M worth of raw material during the year. On average, how many weeks of supply of raw material are on hand at the factory?

Explanation / Answer

Quarter 1 Quarter 2 Quarter 3 Quarter 4 COGS 300 315 360 370 1345 Raw Materials 60 50 65 70 245 Work-in-process and finished goods 110 115 130 160 515 Distribution center inventory 40 42 43 51 176 Total Inventory 936 Average inventory 234 Weeks of supply =( Average aggregate inventory value / Cost of goods sold ) x 52 weeks (((245+515+176)/4) / 1345)x 52 9.04684 weeks

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