The owner of Genuine Reproductions (GR), a company that manufactures reproductio

Question

The owner of Genuine Reproductions (GR), a company that manufactures reproduction furniture, is interested in measuring inventory effectiveness. Last year the cost of goods sold at GR was $4,500,000. The average inventory in dollars was $500,000. GR plans on increasing next year%u2019s sales by 10 percent while maintaining its same average inventory in dollars of $500,000.

a. Calculate the expected inventory turnover for next year.
b. Calculate the expected weeks of supply.

I calculated 9.9 or 10 turnovers for a. (4,500,000 x .10 + 4,500,000, then divided by 500,000 inventory.)

for b, im not sure how to go about it.

Explanation / Answer

a. Next year, cost of goods sold = 4,500,000*(1+10%)= 4950000

expected inventory turnover = COGS/average inventory = 4950000/500,000 = 9.90

b. expected weeks of supply= number of weeks per year/inventory turnover = 52/9.9 = 5.25

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