(Forecasting inventories) Findlay Instruments produces a complete line of medical instruments used by plastic surgeons and has experienced rapid growth over the past 5 years. In an effort to make more accurate predictions of its financing requirements, Findlay is currently attempting to construct a financial-planning model based on the percent of sales forecasting method. However, the firm's chief financial analyst is concerned that the projections for inventories will be seriously in error. She recognizes that the firm has begun to accrue substantial economies of scale in its inventory investment and has documented this fact in the following data and calculations: B a. Plot Findlay's sales and inventories for the past 5 years. What is the relationship between these two variables? b. Estimate firm inventories for 2019, when firm sales are projected to reach $20 million. Use the average percentage of sales for the past 5 years, the most recent percentage of sales, and your evaluation of the true relationship between the sales and inventories from part a to make three predictions. (Click on the following icon @ in order to copy its contents into a spreadsheet.) YEAR 2014 2015 2016 2017 2018 SALES ($000) $15,000 18,000 17,500 20,000 25,000 INVENTORY ($000) $1,150 1,180 1,175 1,200 1,250 % OF SALES 7.67% 6.56% 6.71% 6.00% 5.00% Average 6.39% a. Plot Findlay's sales and inventories for the past 5 years. What is the relationship between these two variables? b. Estimate firm inventories for 2019, when firm sales are projected to reach $20 million. Use the average percentage of sales for the past 5 years, the most recent percentage of sales, and your evaluation of the true relationship between the sales and inventories from part a to make three predictions. a. Findlay's sales and inventory balances for the past 5 years are plotted in the figure below. inventory ($000) 1500- 1400- 1300- 1200- 1100- 1000+ 10000 15000 20000 25000 30000 35000 40000