1. The Marlin Company operates 50 weeks a year, and its cost of goods sold last year was $1,500,000. The firm carries six items in inventory: three raw materials, two work-in-process items, and one finished good. The following table shows the company's last year's average inventory levels for these items, along with their unit values.

Category	Part Number	Average Inventory Units	Value per Unit
Raw Materials	RM-1 RM-2 RM-3	1750 1500 2000	$15 $25 $20
Work-in-process	WIP-1 WIP-2	1500 1200	$40 $50
Finished Goods	FG-1	1000	$75

a.  What is their average aggregate inventory value?

b.  How many weeks of supply does the firm have?

c.  What was their inventory turnover last year?

d. The turnover ratio is widely used because it is a common measure that links to the financial statements of the firm.  Discuss the benefits and drawbacks of using this measure.

Posted Date: 4/6/2013 5:25:36 AM | Location : United States

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