The Average Inventory Comprising Raw Materials, Work- In- Process, and Finished

question 124

Essay

The average inventory comprising raw materials, work- in- process, and finished goods, was found to be $18.4 million last year. If the cost of goods sold per week averaged $1.12 million. Assume the company had 50 working weeks per year.
a. What is their total inventory (measured as weeks of supply)?
b. What is their inventory turnover?

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Definitions:

Supply and Demand

Economic principles that describe the relationship between the availability of a good and the desire for that good, affecting its price.

Component Firms

Companies that supply parts or services to other businesses in the production process.

End Customer

The final consumer of a product or service who does not intend to resell it; the ultimate user in the distribution chain.

Value

The importance, worth, or usefulness of something, perceived by individuals or markets, often influencing decisions and preferences.