Problem 7-4 The following table contains data about the inventory for five items

Question

Problem 7-4 The following table contains data about the inventory for five items at Jones Corporation and the rate of sales expected for each of the five items in the upcoming year Beginning Unit Inventory 310,000 56,000 101,000 360,000 66,000 Ending Unit Inventory 280,000 76,000 113,000 330,000 76,000 Unit Sales Per Day Annual Unit Sales 560,000 96,000 350,000 510,000 245,000 Item # 5,600 3.600 31,000 8,600 3,600 2 Compute the days of supply for each item. (Round your answers to 2 decimal places.) Item # Days of Supply

Explanation / Answer

Days of supply for each item are as follows:

Item 1 = (Days of inventory/Unit sales per day) = (280,000/5,600) = 20 (Ans)

Item 2 = (Days of inventory/Unit sales per day) = (76,000/3,600) = 21.11 (Ans)

Item 3 = (Days of inventory/Unit sales per day) = (113,000/31,000) = 3.65 (Ans)

Item 4 = (Days of inventory/Unit sales per day) = (333,000/8,600) =38.72 (Ans)

Item 5 = (Days of inventory/Unit sales per day) = (76,000/3,600) = 21.11 (Ans)

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