EBK OM
6th Edition
ISBN: 9781305888210
Author: Collier
Publisher: YUZU
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Chapter 12, Problem 2PA
Summary Introduction
Interpretation: Average Inventory value needs to be calculated based on the given information.
Concept Introduction: Inventory turnover helps in finding how many numbers of times a company must purchase inventory over a specified period to sustain in the market.
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Demand for stereo headphones and MP3 players for joggers has caused Nina Industries to grow almost 50 percent over the past year. The number of joggers continues to expand, so Nina expects demand for headsets to also expand, because, as yet, no safety laws have been passed to prevent joggers from wearing them. Demand for the players for last year was as follows:
MONTH
DEMAND (UNITS)
January
4,240
February
4,340
March
4,040
April
4,440
May
5,040
June
4,740
July
5,340
August
4,940
September
5,440
October
5,740
November
6,335
December
6,030
a. Using linear regression analysis, what would you estimate demand to be for each month next year? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
b. To be reasonably confident of meeting demand, Nina decides to use 4 standard errors of estimate for safety. How many additional units should be held to meet this level of confidence? (Do not round intermediate calculations. Round…
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
Work-in-process
Finished goods
1
2
3
4
5
6
7
15000
2500
3000
5000
4000
2000
1000
$3.00
5.00
1.00
14.00
18.00
48.00
62.00
Demand for stereo headphones and MP3 players for joggers has caused Nina Industries to grow almost 50 percent over the past year. The number of joggers continues to expand, so Nina expects demand for headsets to also expand, because yet, no safety laws have been passed to prevent joggers from wearing them. Demand for the players for last year was as follows:
MONTH DEMAND (UNITS)
January 4,220
February 4,320
March 4,020
April 4,420
May 5,020
June 4,720
July 5,320
August 4,920
September 5,420
October 5,720
November 6,320
December 6,020
Using linear regression analysis, what would you estimate demand to be for each month next year? (Round two decimal places)
To be reasonably confident of meeting demand, Nina decides to use 3 standard errors of estimate for safety. How many additional units…
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