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Problem 16-17 (Algo) The U.S. Airfilter company has hired you as a supply chain consultant. The company makes air filters for residential heating and air-
Problem 16-17 (Algo) The U.S. Airfilter company has hired you as a supply chain consultant. The company makes air filters for residential heating and air- conditioning systems. These filters are made in a single plant located in Louisville, Kentucky, in the United States. They are distributed to retailers through wholesale centers in 100 locations in the United States, Canada, and Europe. You have collected the following data relating to the value of inventory in the U.S. Airfilter supply chain: QUARTER 1 QUARTER 3 QUARTER 4 (JANUARY QUARTER 2 (JULY ( (OCTOBER THROUGH (APRIL THROUGH THROUGH THROUGH MARCH) JUNE) SEPTEMBER) DECEMBER) All amounts in millions of u.s. dollars Sales (total quarter): United states Canada Europe 414 135 41 402 96 34 520 126 42 514 117 25 Cost of goods sold (total quarter) 384 347 453 434 Raw materials at the Louisville plant (end-of-quarter) 73 62 67 72 109 159 124 222 Work-in-process and finished goods at the Louisville plant (end-of-quarter) Distribution center inventory (end-of-quarter): United states Canada Europe 58 17 6 31 19 4 34 22 9 38 20 6 a. What is the average inventory turnover for the firm? (Round your answer to 3 decimal places.) Answer is complete but not entirely correct. Average inventory turnover 1.405 X b. If you were given the assignment to increase inventory turnover, what would you focus on? Increase the amount of inventory or increase sales or both Reduce the amount of inventory or reduce sales or both Reduce the amount of inventory or increase sales or both c. The company reported that it used $500M worth of raw material during the year. On average, how many weeks of supply of raw material are on hand at the factory? (Round your answer to 2 decimal places.) X Answer is complete but not entirely correct. Weeks of raw material supply 24.88
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