In order to unlock the competitive advantage that McDonalds can gain from the supply chain strategy and design, it is necessary to continuously measure the supply chain efficiency. Measures of inventories are reported in three basic ways: average aggregate inventory value, weeks of supply, and inventory turnover. Due to the short shelf life, the stock is measured in days of supply rather than weeks of supply, and average aggregate inventory value will not include work in progress due to the fast turnover from raw material to finished goods. To measure stock levels and efficiencies, McDonalds management asks that you assess their inventory efficiencies. The cost of goods sold at a McDonalds outlet was three million four hundred (3 400 000) rand, and the company works all 52 weeks of the year.

2.1 Calculate the average aggregate inventory value for McDonalds. The data in the table below shows the average inventory levels. Conclude with advice as to whether McDonalds will be able to provide a constant flow of meals to the communities where the outlets operate if the demand for burgers (beef and chicken) and chips is 18 000 units, and is 3 400 for chicken nuggets. Conclude with advice that you will offer to management. (15)

	Product	Avarage Inventory Level	Unit value
Raw Material	Buns	20 000	5.00
	Combines Garnish Packets	10 000	7.50
	Cheese Slices	20 000	4.50
	Beef patties	12 000	8.00
	Chicken patties	8 000	6.00
	Chicken nuggets	4 500	4.50
	Potato chips bags	4 000	34.00
	1.5 litre bottles of oil	800	28.00
	Variety of beverages in litres	10 000	10.00
	Ice cream in Kg	15 000	12.00
Finished goods	Beef burgers	120	77.50
	Chicken burgers	80	52.00
	Chicken nuggets (Pack of 12	35	76.00
	Potato chips	220	32.50

Calculate the weeks of supply and inventory turnover, and write a brief report on whether the inventory levels are sufficient and the management thereof efficient.