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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
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: Sales (total quarter): United states Canada Europe Cost of goods sold (total quarter) Raw materials at the Louisville plant (end-of-quarter) Work-in-process and finished goods at the Louisville plant (end-of-quarter) Distribution center inventory (end-of-quarter): United states Canada Europe QUARTER 1 (JANUARY THROUGH MARCH) QUARTER 3 (JULY QUARTER 4 (OCTOBER THROUGH DECEMBER) QUARTER 2 (APRIL THROUGH THROUGH JUNE) SEPTEMBER) All amounts in millions of U.S. dollars 300 350 405 375 75 60 75 70 30 33 20 15 280 295 340 350 50 40 40 55 60 100 105 120 150 I 205 27 11 4 255 23 30 15 16 5 a. What is the average inventory turnover for the firm? (Round your answer to 3 decimal places.) Average inventory turnover. 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.) Weeks of raw material supply
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