Answered: TABLE 12.3 SAPPHIRE AEROSPACE INVENTORY…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Question

Sapphire Aerospace operates 52 weeks per year, and its cost of goods sold last year was $6,500,000. The firm carries eight items in inventory: four raw materials, two work-in-process
items, and two finished goods. Table 12.3 shows last year’s average inventory levels for these items, along with their unit values.
a. What is the average aggregate inventory value?
b. How many weeks of supply does the firm have?
c. What was the inventory turnover last year?

TABLE 12.3 SAPPHIRE AEROSPACE INVENTORY ITEMS
Category
Part Number Average Inventory Units Value per Unit
Raw materials
RM-1
20,000
$1
RM-2
5,000
5
RM-3
3,000
6
RM-4
1,000
8
Work-in-process
WIP-1
6,000
10
WIP-2
8,000
12
Finished goods
FG-1
1,000
65
FG-2
500
88

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