Weekly requirement of 3600 is supplied twice a week, Thus Supply quantity = 3600
ID: 373712 • Letter: W
Question
Weekly requirement of 3600 is supplied twice a week, Thus Supply quantity = 3600/2 = 1800
Running inventory thus fluctuates between 1800 and Zero. Thus, average running inventory = 1800/2 = 900
Safety stock = 380
Total average inventory = Average running inventory + Safety stock = 900 + 380 = 1280
Annual demand of Hamburger = 3600/week x 52 weeks = 187200
Therefore ,
Inventory turnover
= Annual demand / Average inventory
= 187200 / 1280
= 146.25
INVENTORY TURNOVE RATIO = 146.25 PER YEAR
Number of days supply in hand
= Average inventory / Annual demand x 365 days
= 1280 /187200 x 365 days
= 2.49
ON AVERAGE 2.49 DAYS SUPPLY ARE IN HAND
INVENTORY TURNOVE RATIO = 146.25 PER YEAR
Explanation / Answer
The McDonald's fast-food restaurant on campus sells an average of 3,600 quarter-pound hamburgers each week. Hamburger patties are resupplied twice a week, and on average the store has 380 pounds of hamburger in stock. Assume that the hamburger patties cost $4 a pound and there are 52 weeks in a year a. What is the inventory turnover for the hamburger patties? (Round your answer to 2 decimal places.) Inventory turnover atio per year b. On average, how many days of supply are on hand? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Average days of supply
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