A furniture manufacturer with an annual cost of goods sold of $320,000 has the following breakdown for average inventory:
$26,000 - Raw materials
$18,000 - Work in process
$14,000 - Finished goods
a. What is the annual inventory turnover?
b. Why is inventory turnover considered to be an effective measure of a company's competitiveness?
c. How might JIT increase inventory turns?
d. What other techniques does your book suggest (in this and earlier chapters) that might be used to increase inventory turns?