Arrow Distributing Corp. (Table 11.9) likes to track inventory by using weeks of supply as well as by inventory turnover.
a) What is its weeks of supply?
b) What percent of Arrow's assets are committed to inventory?
c) What is Arrow's inventory turnover?
d) Is Arrow's supply chain performance, as measured by these inventory metrics, better than that of Baker in Problem?
Problem - Baker Mfg. Inc. (see Table 11.9) wishes to compare its inventory turnover to those of industry leaders, who have turnover of about 13 times per year and 8% of their assets invested in inventory.
a) What is Baker's inventory turnover?
b) What is Baker's percent of assets committed to inventory?
c) How does Baker's performance compare to the industry leaders?
|
Table 11.9
|
|
Arrow Distributing Corp
|
|
Net revenue
|
$16,500
|
|
Cost of sales
|
$13,500
|
|
Inventory
|
$1,000
|
|
Total assets
|
$8,600
|
|
Baker Mfg. Inc.
|
|
Net revenue
|
$27,500
|
|
Cost of sales
|
$21,500
|
|
Inventory
|
$1,250
|
|
Total assets
|
$16,600
|