Consider the following annual information about three companies in the same manufacturing industry. Inventory Management Company A B Cc (LO 5)

Production method JIT JIT Traditional 4 Sales revenue $327 ,000,000 $584,000,000 $8,508,000,000 No. of employees . 1,600 3,600 29,500 Cost of goods sold $245,000,000 $414,000,000 $5,191,000,000 Inventories (average) $5,700,000 $13,500,000 $763,000,000 Required

a. Compare the three companies’ uses of human and inventory resources using revenue per employee and inventory turnover measurers.

b. Assume that you are a cost-management analyst employed by the least efficient user of inventories.

At the request of the company CEO, prepare a short report that analyzes the relative cost advantages and outlines the types of costs and benefits that your company should expect by adopting JIT production