Category Part Number Average Level Unit Value Raw materials 15,000 $3.00 2 2,500 5.00 3 3,000 1.00 Wark-in-pracess 4 5,000 14.00 5 4,000 18.00 Finished goods 2,000 48.00 7 1,000 62.00

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter7: Nonlinear Optimization Models
Section: Chapter Questions
Problem 56P
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A firm’s cost of goods sold last year was $3,410,000, and the firm operates 52 weeks per year. It carries seven items in inventory: three raw materials, two work-in-process items, and two finished goods. The following table contains last year’s average inventory level for each item, along with its value.
a. What is the average aggregate inventory value?
b. How many weeks of supply does the firm maintain?
c. What was the inventory turnover last year?

Category
Part Number
Average Level
Unit Value
Raw materials
15,000
$3.00
2
2,500
5.00
3
3,000
1.00
Wark-in-pracess
4
5,000
14.00
5
4,000
18.00
Finished goods
2,000
48.00
7
1,000
62.00
Transcribed Image Text:Category Part Number Average Level Unit Value Raw materials 15,000 $3.00 2 2,500 5.00 3 3,000 1.00 Wark-in-pracess 4 5,000 14.00 5 4,000 18.00 Finished goods 2,000 48.00 7 1,000 62.00
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