EBK OM
6th Edition
ISBN: 9781305888210
Author: Collier
Publisher: YUZU
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Chapter 12, Problem 11PA
Summary Introduction
Interpretation:Days of supply inventory the firm is holding is to be calculated.
Concept Introduction:Days of supply inventory tells how many days the inventory will last based on the sales of the organization. In order to ensure that the company will not run short of inventory it is essential that they calculate the days of supply inventory to avoid the risks in supply.
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Use the information below to answer the following question(s).
Office Supply House purchases 4,160 reams of paper per year, ordered in lots of 80
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Relevant insurance, materials
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The figure on the right shows the inventory levels
cherries (in pounds) at one store and the order-reorder periods over 1 year. Refer to the figure to answer the following questions.
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(a) What is the average amount of cherries in inventory during one order-reorder period?
(b) What is the maximum amount of cherries in inventory during one order-reorder period?
(c) How many orders were placed during the year?
(d) How many pounds of cherries were sold during the year?
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(a) What is the average amount of cherries in inventory during one order-reorder period?
The average amount of cherries in inventory during one order-reorder period is
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A restaurant has annual sales of $420,000, an average inventory of $6000, and an annualcost of goods sold of $264,000. What are the restaurant’s days-of-supply of inventory?(Assume 365 days per year.)
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