1. Grannie’s Jelly Beans currently has an inventory turnover of 36.5, a payables turnover of 18.25, and a receivables turnover of 24.33. How many days are in the cash cycle (to the nearest whole year and please show how you arrive at your answer)
2. A grocery store sells 43,000 cans of peas per year at an average price of $0.95 per can. The carrying cost per can is $0.05. The store orders 2,000 cans at a time and the fixed order cost of $4.80 per order. The peas are sold out before they are restocked. What is the economic order quantity that the store should order?
3. Clap Off manufacturing uses 1,150 switch assemblies per week, and then reorders another 1,150 for the next week. If the carrying cost per unit is $5.50 and the fixed order cost is $62.50:
a) What is the annual cost of restocking inventory each week?
b) What is the annual carrying cost of the average inventory of switches?
Is Clap Off using an efficient inventory management system, or can they lower the annual cost of inventory? If so, how? (in words – no calculation)