Practical Management Science
Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Hi please help me with this one. You may use excel if you want thank you! :)

2–12 Inventory management Wilkins Manufacturing has sales of $4 million and a
gross profit margin of 40%. Its end-of-quarter inventories are
Quarter
Inventory
1
$ 400,000
2
800,000
3
1,200,000
4
200,000
a. Find the average quarterly inventory and use it to calculate the firm's inven-
tory turnover and the average age of inventory.
b. Assuming that the company is in an industry with an average inventory
turnover of 2.0, how would you evaluate the activity of Wilkins’ inventory?
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Transcribed Image Text:2–12 Inventory management Wilkins Manufacturing has sales of $4 million and a gross profit margin of 40%. Its end-of-quarter inventories are Quarter Inventory 1 $ 400,000 2 800,000 3 1,200,000 4 200,000 a. Find the average quarterly inventory and use it to calculate the firm's inven- tory turnover and the average age of inventory. b. Assuming that the company is in an industry with an average inventory turnover of 2.0, how would you evaluate the activity of Wilkins’ inventory?
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