The U.S. Airfilter company has hired you as a supply chain consultant.
The company makes air filters for residential heating and air
conditioning systems. These filters are made in a single plant located
in Louisville, Kentucky, in the United States. They are distributed to
retailers through wholesale centers in 100 locations in the United
States, Canada, and Europe. You have collected the following data
relating to the value of inventory in the U.S. Airfilter supply chain:
QUARTER 1
(JANUARY THROUGH
MARCH) QUARTER 2
(APRIL THROUGH JUNE) QUARTER 3
(JULY THROUGH SEPT) QUARTER 4
(OCTOBER THROUGH
DECEMBER)
SALES (TOTAL QUARTER)
UNITED STATES 300 350 405 375
CANADA 75 60 75 70
EUROPE 30 33 20 15
COST OF GOODS
SOLD (TOTAL QUARTER) 280 295 340 350
QUARTER 1
(JANUARY THROUGH
MARCH) QUARTER 2
(APRIL THROUGH JUNE) QUARTER 3
(JULY THROUGH SEPT) QUARTER 4
(OCTOBER THROUGH
DECEMBER)
Raw materials at the louisville plant (end of quarter)
Work in progress and finished goods at the Louisville plant (end of
quarter) 300 350 405 375
Distribution center inventory
UNITED STATES 25 27 23 30
CANADA 10 11 15 16
EUROPE 5 4 5 5
All amounts in millions of US dollars
a. What is the average inventory turnover for the firm?
b. If you were given the assignment to increase inventory turnover, what
would you focus on? Why?
c. The company reported that it used $500M worth of raw material during
the year. On average, how many weeks of supply of raw material are on
hand at the factory?
Business Homework Solutions
#43641
US Airfilter Company: Supply Chain Design
See the attached file.
Given the attached information, please answer the following questions:
a. What is the average inventory turnover for the firm?
b. If you were given the assignment to increase inventory turnover, what would you focus on? Why?
c. The company reported that it used $500M worth of raw material during the year. On average, how many weeks of supply of raw material are on hand at the factory?
In a 399 word discussion, the solution answers each questions in a full paragraph including calculations as necessary to explain the answer.
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