*****THE ANSWER IS NOT (1215/194)*52***** The U.S. Airfilter company has hired y
ID: 2747705 • Letter: #
Question
*****THE ANSWER IS NOT (1215/194)*52*****
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)
The company reported that it used $470M 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.)
*****THE ANSWER IS NOT (1215/194)*52*****
*****THE ANSWER IS NOT (1215/194)*52*****
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:
Explanation / Answer
a.
Cost of goods sold (Total year)
265+275+335+340 = 1215
Average aggregate inventory value (total year)
Raw materials: 50+38+50+56 = 194
WIP and finished goods: 90+98+111+140=439
Distribution Inventory: 40+42+43+51=176
105+475+176=756
Average inventory turnover = 1215 / 756 = 1.607
b. We should focus on average aggregate inventory value than cost of goods sold. Because we can control average aggregate inventory values easily by decreasing Distribution center or Work-in –Process.
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