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
Sales (total quarter):
Cost of goods sold (total quarter)
Raw materials at the Louisville plant (end-of-quarter)
Work-in-process and fi nished goods at the Louisville plant (end-of-quarter)
Distribution center inventory (end-of-quarter):
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