BOOTS ROP = ddLT + SS Inventory Turns = Cost of Goods Sold/ Inventory Value You have been invited as a Management consultant to NOTAP MATERIALS GROUP (NMG). NMG has just finished their year-end financial audit and have uncovered a huge stock of inventory on part NMG-AXB0001 that they will need to write off because of poor stock management. On getting to NMG, you met with the VP of Operations and the SVP of Finance who are visibly worried that their end of year balance sheet as well as profit and loss will take a big hit because of the stock practices. They provided you the following information. Working days per week : 5 days Business shutdown : 1 week for summer holidays and 1 week for December holidays. Otherwise they are operational year round. Sales : They have a business target to increase their sales of NMG-AXB0001 by 20% next year. They have provided sales per month for current year as follows. (Note : NMG-AXB0001 is packed in 10 units per package and costs $20 per unit. Each package is sold for $2500) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Sales (Packages) 35 34 45 48 53 58 23 24 30 50 20 25 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Sales (Packages) 35 34 45 48 53 58 23 24 30 50 20 25 3PL storage warehouse charges : $25 per package Ordering information for NMG-AXB0001 Order Lead time: 7weeks yr Order processing cost : Subscription to the Supplier portal costs $100 per year. They have determined that the ordering clerk costs them $50 per year in ordering tasks. Inventory information NMG usually carries 5 weeks of inventory on the average but because of recent transportation problems, the VP of Operations mentioned that they have approved an extra 2 weeks of inventory...just in case. As the consultant, advise them on the following. a) What is the current Inventory Turns ? You MUST show all your calculations. ( 4 Marks) b) Assuming everything else stays the same and they achieve their sales goal for next year, what will be their inventory turns by end of next year? ( 2 Marks) c) They use perpetual inventory counting. At what inventory level should they reorder NMG-AXB0001 packages? You MUST show all your calculations. (4 marks) d) What quantity (in units) should they reorder each time for the next year and how many orders will they need to place? You MUST show all your calculations. (4 marks)