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Assume a company maintains an inventory level of $30,000, meaning the average balance in the inventory records is $30,000. Also assume it's annual cost of
Assume a company maintains an inventory level of $30,000, meaning the average balance in the inventory records is $30,000. Also assume it's annual cost of good sold (COGS) is $120,000 The management is proposing to reduce inventory levels to $15,000 with no impact on cost of goods sold. To do so they propose working with suppliers to get quicker deliveries and to make smaller, more frequent orders. Required Compute the company's inventory turnover and its days sales in inventory under both current conditions and proposed conditions. Evaluate and comment on the merits of their proposal given your analysis for part 1. Identify any concerns you might have about the proposal
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