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The U.S. Airfilter company has hired you as a supply chain consultant. The company makes air filters for residential heating and air-conditioning systems.
These filters are made in a single plant located in Louisville Kentucky in the United States. They are distributed to retailers through wholesale centers
in 100 locations in the United States Canada and Europe. You have collected the following data relating to the value of inventory in the U.S. Airfilter
supply chain:

Quarter 1

Quarter 2

Quarter 3

Quarter 4

(January

(April

(July through

(October through

through March)

through June)

September)

December)

Sales (total quarter):

United States

300

350

405

375

Canada

75

60

75

70

Europe

30

33

20

15

Cost of goods sold (total quarter)

280

295

340

350

Raw materials at the Louisville plant (end-of-quarter)

50

40

55

60

Work-in-process and fi nished goods at the Louisville plant (end-of-quarter)

100

105

120

150

Distribution center inventory (end-of-quarter):

United States

25

27

23

30

Canada

10

11

15

16

Europe

5

4

5

5

All amounts in millions of U.S. dollars.

a. What is the average inventory turnover for the firm?

b. If you were given the assignment to increase inventory turnover what would you focus on? Why?

c. The company reported that it used $500M worth of raw material during the year. On average how many weeks of supply of raw material are on hand at the
factory?

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