A part of financial report of company Z is given below. Calculate days of supply for company Z. Value of finished goods on-hand $2,930
Value of production materials on-hand $1,640
Value of work-in-process inventory $710
Cost of goods sold $12,500
Net revenue $24,800

a. More than 0 but less than or equal to 60
b. More than 60 but less than or equal to 100
c. More than 100 but less than or equal to 140
d. More than 140 but less than or equal to 200 More than 200

Company Z

The days of supply for Company Z are:

d. More than 140 but less than or equal to 200

Explanation:

a) Data and Calculations:

Value of finished goods on-hand $2,930

Value of production materials on-hand $1,640

Value of work-in-process inventory $710

Total inventory = $5,280

Cost of goods sold $12,500

Net revenue $24,800

Days of Supply = Average Inventory/Cost of goods sold * 365

= $5,280/$12,500 * 365

= 154.2 days

b) The Inventory Days of Supply for Company Z or Days Inventory Outstanding" or Inventory Period measures the average number of days Company Z holds its inventory before selling it. As an efficiency ratio, the ratio measures the number of days Company Z's funds are held up in inventory before actual sales to customers.

explanation:

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whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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