operations management, ch11
DESCRIPTION
Solutions Manual Ch11TRANSCRIPT
Chapter 11
248PART FIVESYMBOL 108 \f "Wingdings" \s 5Operating DecisionsSupply-Chain ManagementSYMBOL 108 \f "Wingdings" \s 5CHAPTER ELEVEN249
Chapter
11Part Five Operating DecisionsSupply-Chain Management
PROBLEMS1.Buzzrite Company
a.Current Years average aggregate value= $48,000,000/6 = $8,000,000
Next years average aggregate inventory value
= ($48,000,000 1.25)/6 = $10,000,000
Increase in the average aggregate inventory value
= ($10,000,000 8,000,000) = $2,000,000
b.Number of turns to support next years sales with no increase in inventory value= (1.25)(6) = 7.5 turns.
2.Precision Enterprises. Average aggregate inventory value
= Raw materials + WIP + Finished goods
= $3,129,500 + $6,237,000 + $2,686,500
= $12,053,000
a.Sales per week= Cost of goods sold/52 weeks per year
= $32,500,000/52
= $625,000
Weeks of supply= Average aggregate inventory value/
Weekly sales
= $12,053,000/$625,000
= 19.28 wk
b.Inventory turnover= (Annual sales)/(Average aggregate
inventory value)
= $32,500,000/$12,053,000
= 2.6964 turns/year
3.One product line
Inventory turnover= (Annual sales)/(Average aggregate
inventory value)
10.0= $985,000/Average aggregate
inventory value
Average aggregate inventory value= $985,000/10 = $98,500
4.Bawl Corporation. Average aggregate inventory value can be calculated as: Average aggregate inventory value= Raw materials + WIP + Finished goods
= $2,470,000 + $1,566,000 + $1,200,000
= $5,236,000
a.Sales per week= Cost of goods sold/52 weeks per year
= $48,000,000/52
= $923,076
Weeks of supply= Average aggregate inventory value/Weekly sales
= $5,236,000/$923,076
= 5.7 wk
b.Inventory turnover= (Annual sales)/(Average aggregate
inventory value)
= $48,000,000/$5,236,000
= 9.16 turns/year
5.A firm
a.Sales per week= Cost of goods sold/52 weeks per year
= $3,500,000/52
= $67,308
Weeks of supply= Average aggregate inventory value/Weekly sales
= $1,200,000/$67,308
= 17.8 wk
b.Inventory turnover= (Annual sales)/(Average aggregate
inventory value)
= $3,500,000/$1,200,000
= 2.9 turns/year
247