CBA 390 - CHAPTER 8 HW

CBA 390 - JSU - Chapter 8 HW

54.3

Suppose a retailer turns its inventory of soda 51 times per year. On average, it has 389 bottles of soda on its shelves.

What is the retailer’s average daily sales rate? (Assume 365 days per year.)

Note: Round your answer to 1 decimal place.

55.3

Suppose a retailer’s annual inventory turns are 6.6.

What are its days-of-supply of inventory? (Assume 365 days per year.)

Note: Round your answer to 1 decimal place.

31.7

Apple’s days-of-supply of inventory are 11.5.

What are its annual inventory turns? (Assume 365 days per year.)

Note: Round your answer to 1 decimal place.

19.2

An electronics manufacturer has 19 days-of-supply of inventory for a particular cell phone model.

Assuming 365 days per year, what is the annual inventory turns of this cell phone model?

Note: Round your answer to 1 decimal place.

40.83

Suppose that a movie theater snack bar turns over its inventory of candy 3.5 times per month.

If the snack bar has an average of 350 boxes of candy in inventory, what is its average daily sales rate for candy? (Assume that there are 30 days per month.)

Note: Round your answer to 2 decimal places.

2.7

Suppose that a local hardware store turns over its inventory of power tools 6.6 times per year.

If the hardware store has an average inventory of 150 power tools, what is its average daily sales rate for power tools? (Assume that there are 365 days per year.)

Note: Round your answer to 1 decimal place.

9.5

A grocery chain recently reported annual sales of $84 billion, inventory of $7.4 billion, and annual cost of goods sold of $70 billion.

What is the firm’s annual inventory turns?

Note: Round your answer to 1 decimal place.

9.2 Billion

A manufacturer of farm equipment has annual turns of 5, and its Cost of Goods Sold (COGS) is $46 billion.

What is the average inventory it holds? (in billion $s)

Note: Round your answer to 1 decimal place.

2.8

A mining company reported annual sales revenue of $71 billion, annual cost of goods sold of $55 billion, and inventory of $19 billion.

What is the firm’s annual inventory turns?

Note: Round your answer to 1 decimal place.

1.1

A manufacturing company producing medical devices reported $59 million in sales over the last year. At the end of the same year, the company had $16 million worth of inventory of ready-to-ship devices.

Assuming that units in inventory are valued (based on cost of goods sold) at $500 per unit and are sold for $1,750 per unit, what is the company’s annual inventory turnover?

Note: Round your answer to 1 decimal place.

4.10

A restaurant has annual sales of $492,000, an average inventory of $6,000, and an annual cost of goods sold of $295,000.

What is the restaurant’s monthly inventory turns?

Note: Round your answer to 2 decimal places.

6.1

A restaurant has annual sales of $405,000, an average inventory of $4,500, and an annual cost of goods sold of $269,000.

What is the restaurant’s days-of-supply of inventory? (Assume 365 days per year.)

Note: Round your answer to 1 decimal place.

31.0

A retailer has annual sales of $500,000 and an average finished-goods inventory of $11,000.

If the retailer sells each unit for an average of $22 and purchases the units for $15, what is its annual inventory turnover?

Note: Round your answer to 1 decimal place.

1.00

An online shoe retailer’s annual cost of holding inventory is 34 percent. The firm operates with a days-of-supply of 21 days, and assume there are 365 days per year.

What is the inventory holding cost (in $s) for a pair of shoes that the firm purchased for $51?

Note: Round your answer to 2 decimal places.

0.47

A company’s holding cost is 13 percent per year. Its annual inventory turns are 12. The company buys an item for $43.

What is the average cost (in $s) to hold each unit of this item in inventory?

Note: Round your answer to 2 decimal places.

165

A computer company’s yearly inventory cost is 47 percent (which accounts for the cost of capital for financing the inventory, warehouse space, and the cost of obsolescence). Last year, the company had $350 million in inventory and cost of goods sold of $37 billion.

What is the company’s total inventory cost for the year (in million $s)?

Note: Round your answer to the nearest integer.

28.80

An integrated circuit manufacturer’s annual cost of holding inventory is 41 percent.

What inventory holding cost (in $s) do they incur for an item that costs $281 and has a three-month supply of inventory on average?

Note: Round your answer to 2 decimal places.

1.25

A local bookstore turns over its inventory once every four months. The bookstore’s annual cost of holding inventory is 34 percent.

What is the inventory holding cost (in $s) for a book that the bookstore purchases for $11 and sells for $17?

Note: Round your answer to 2 decimal places.

0.53

A bicycle manufacturer purchases bicycle seats from an outside supplier for $23 each. The manufacturer’s inventory of seats turns over 1.2 times per month, and the manufacturer has an annual inventory holding cost of 33 percent.

What is the inventory holding cost (in $s) for a bicycle seat?

Note: Round your answer to 2 decimal places.

Flour

Which of the following is an example of raw material inventory for C&A Bakery?

• Flour

• Cupcake mix prepared from scratch

• Ovens

• Cupcakes freshly out of the oven

Forecasting future demand

Which of the following is an essential skill for inventory management?

• Forecasting future demand

• Negotiating product prices

• Designing appealing websites

• Developing new product ideas

to ensure employees are motivated

The reasons for holding inventory include all the following EXCEPT _________.

• it takes time to transform inputs into outputs and move them to where they are needed

• to allow output rate to remain relatively stable as demand varies predictably over time

• to ensure employees are motivated

• to serve as a buffer against demand uncertainty

Buffers

A machine in a production process has been breaking down frequently and affecting downstream resources. Pending the machine problem being addressed, management has been working the machine overtime at the end of each day to build inventory immediately after it so that future breakdowns will not affect the process to such an extent. This is an example of holding inventory for what reason?

• Seasonality

• Flow time

• Batching

• Buffers

20

C&A Candy has on average $5,000 in inventory and its daily sales are $250. What is its days-of-supply?

• 1,250,000

• 500

• 250

• 20

Average amount of time

The days-of-supply of a process is the _________blank it takes for a unit to flow through the system.

• total amount of time

• total amount of physical units

• average amount of time

• average amount of physical units

more, less

Higher days of supply means _________blank inventory. Higher turns mean _________blank inventory.

Multiple Choice

• more, more

• more, less

• less, more

• less, less

Increases from 2,400 to 6,000 dozen

C&A Dairy sells 1,200 dozen eggs each day. If C&A’s days-of-supply increases from 2 days to 5 days, what will happen to its average inventory?

• Increases from 2,400 to 6,000 dozen

• Decreases from 600 to 240 dozen

• Remains the same

• Cannot be determined

cost of goods sold, income statement

Flow rate can be estimated from the value of _________blank reported in a publicly traded company’s _________blank.

Multiple Choice

• revenue, balance sheet

• cost of goods sold, balance sheet

• revenue, income statement

• cost of goods sold, income statement

4

C&A Industries reports annual sales of $5 million, cost of goods sold of $2 million, inventory of $0.5 million, and net income of $0.75 million. What are C&A’s annual inventory turns?

Multiple Choice

• 10

• 4

• 0.25

• 0.1

0.9 Million

C&A Industries reports has annual turns of 10, cost of goods sold of $9 million, and revenue of $20 million. What is its average inventory?

Multiple Choice

• $90 million

• $20 million

• $1.1 million

• $0.9 million

4

C&A Industries reports annual sales of $30 million, cost of goods sold of $15 million, inventory of $5 million, and net income of $2 million. What is C&A’s months-of-supply?

Multiple Choice

• 0.25

• 0.33

• 3

• 4

12.5 per year

C&A Industries reports holds on average $20,000 in inventory throughout the year. Its cost of goods sold is $250,000 and sales are $400,000. What is C&A’s inventory turns?

• 1.6 per year

• 12.5 per year

• 20 per year

• Cannot be determined

4.2

A hardware store reports annual sales of $375,000, cost of goods sold of $185,400, inventory of $65,000, and net income of $80,000. What is its months-of-supply of inventory?

Multiple Choice

• 0.5

• 2.0

• 2.9

• 4.2

12.3 turns per year

The following table provides past financial information for Kroger (in $ million):

Sales	95,751
Cost of goods sold	76,858
Inventory	6,244

What were Kroger’s inventory turns?

Multiple Choice

• 5.5 turns per year

• 8.1 turns per year

• 12.3 turns per year

• 15.3 turns per year

77.7 days

A local parts supply store has provided the following financial information for the past year (in $):

Sales	344,740
Cost of goods sold	207,852
Inventory	44,224

How many days of supply did the store hold in the past year (assume 365 days per year)?

Multiple Choice

• 220.1 days

• 116.4 days

•  77.7 days

• 46.8 days

Spoilage cost

Bread expires at the end of the day and cannot be sold. This is an example of which component of the store’s inventory holding cost?

Multiple Choice

• Storage cost

• Spoilage cost

• Obsolescence cost

• Opportunity cost of capital