Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Transcribed Image Text:Dara Jones, operations manager of Arrow Distributing Corp., likes to track inventory by using weeks of supply as well as
by inventory turnover.
Arrow Distributing Corp.
$17,300
$14,230
$1,100
$8,440
a) What is its weeks of supply? weeks (round your response to two decimal places).
b) What percentage of Arrow's assets are committed to inventory? % (enter your response as a percentage rounded
to two decimal places).
c) What is Arrow's inventory turnover? times per year (round your response to two decimal places).
d) Suppose a manufacturer has an inventory turnover of 13.5 times per year. Arrow's supply chain performance relative
to the manufacturer's, as measured by inventory turnover, is
Net Revenue
Cost of sales
Inventory
Total assets
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Note: We are allowed to do first three sub-parts only.
Inventory management is the process of analysing and managing the inventory of a company. It is an important aspect of supply chain management and it has to be monitored continuously.
There are a number of factors that need to be taken into consideration when it comes to inventory management. The first one is that inventory should be monitored for its lifespan in order to know when the stock will run out which will help with the production and purchase decisions. Secondly, the company's needs should be taken into consideration as well as their budget, which will ultimately determine how many products need to be ordered at any given time. Furthermore, there should also be a system in place for handling incoming orders as well as outgoing shipments so that they can be matched up efficiently and accurately with what's on offer in terms of products.
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