EBK OM
6th Edition
ISBN: 9781305888210
Author: Collier
Publisher: YUZU
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Question
Chapter 12, Problem 2CSQD
Summary Introduction
Interpretation:
Ways to handle $886000 in obsolete inventory.
Concept Introduction:
The cash-to-cash conversion cycle is one of the most crucial financial metrics for supply chain performance. It is defined as the cash flows from the time costs are incurred (such as purchasing the raw material inventory) to when it is paid (i.e. the accounts receivable).
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- What events might occur when an organization is out of stock of a needed product? How might the cost of a stock out be calculated?arrow_forwardAs an operations management consultant, you have been asked to evaluate a furniture manufacturer’s cash to cash conversion cycle under the following assumptions: sales of $23.5 million, cost of goods sold of $20.8 million, 50 operating weeks a year, total average on hand inventory of $2,150,000, accounts receivable equal to $2,455,000, and accounts payable of $3,695,000. What do you conclude? What recommendations can you make to improve performance? What would be the impact of reducing the accounts payable from $3,695,000to $2,000,000 and all other data remained the same? Please show in detail these impacts quantitatively in your answers.arrow_forwardThe grocery industry has an annual inventory turnover of about 15 times. Organic Grocers, Inc., had a cost of goods sold last year of $11,430,000; its average inventory was $999,780. What was Organic Grocers' inventory turnover, and how does that performance compare with that of the industry? a) What was Organic Grocers' inventory turnover? nothing times per year (round your response to two decimal places).arrow_forward
- As an operations management consultant, you have been asked to evaluate a furniture manufacturer’s cash-to-cash conversion cycle under the following assumptions: sales of $23.5 million, cost of goods sold of $20.8 million, 50 operating weeks a year, total average on-hand inventory of $2,150,000, accounts receivable equal to $2,455,000, and accounts payable of $3,695,000. What do you conclude? What would be the impact of reducing the accounts payable from $3,695,000to $2,000,000 and all other data remained the same?arrow_forwardSticky Fingers Inc. produces packing and masking tape. Last year’s annual report has been compiled, and you are in charge of business analysis for the year. The company had a goal for inventoryturnover of 6 for last year. The actual results were cost of goods sold of $400,000, beginning inventory of $50,000, and ending inventory of $70,000. What was the actual inventory turnover, and atwhat percent did the firm achieve its goal?arrow_forwardIs it better to maintain a large inventory? Why?arrow_forward
- How can you assess the criticality of an inventory shortage as a store manager?arrow_forwardHow does inventory turnover provide significant insights into the productivity and performance of an organisation?arrow_forwardIn what ways can inventory turnover provide important insights about an organization’s competitivenessand efficiency?arrow_forward
- Why is there a need to balance the inventory needs with customer’s needs?arrow_forwardIf Super Toy Mart had made a perfect forecast of demand over the past 12 months and had decided to order 1/12 of that annual demand each month, what would its bullwhip measure have been?arrow_forwardWhy is the inventory turnover ratio of a business desirable?arrow_forward
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Inventory Management | Concepts, Examples and Solved Problems; Author: Dr. Bharatendra Rai;https://www.youtube.com/watch?v=2n9NLZTIlz8;License: Standard YouTube License, CC-BY