A manufacturer of air-conditioner compressors is concerned that too much money is tied up in its value chain. Average raw material inventory is $40 million and work-in-process (WIP) production inventory is $20 million. Sales are $10 million per week, and finished goods inventory averages $30 million. The average outstanding accounts receivable is $55 million. Assume 50 weeks in 1 year. The value chain is as follows:

Raw Material Inventory Production (WIP) Inventory Finished Goods Accounts Receivable

What is the total flow (process) time of a throughput dollar? Round your answers to two decimal places.

Raw Material Inventory WIP Production Inventory Finished Goods Inventory Accounts Receivable Inventory

Total Flow Time, years What is the average dollar inventory in the value chain? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to the nearest whole number.

$ million

Which of the major stagesraw materials, WIP, finished goods, or accounts receivableis the best candidate for freeing up dollars for the air-conditioner manufacturer?

is the best candidate for freeing up dollars.

What is the target level of average accounts receivable inventory if management can reduce the time a dollar spends in accounts receivable inventory (processing and collections) by one-half by improving the accounts receivable process? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to one decimal place.

$ million