Question

Suppose a retailer’s annual inventory turns are 7.5.

What are its days-of-supply of inventory?

Answer 1

The days-of-supply of inventory is calculated by dividing the number of days in a year by the annual inventory turns. In this case, the retailer has a days-of-supply of inventory of approximately 49 days.

Step-by-step explanation:

The annual inventory turns of a retailer is a measure of how many times the retailer sells and restocks its entire inventory in a year. To calculate the days-of-supply of inventory, you divide the number of days in a year by the annual inventory turns. In this case, since the annual inventory turns are 7.5, you divide 365 (the approximate number of days in a year) by 7.5 to get the days-of-supply of inventory.Days-of-supply of inventory = 365 / 7.5 = 48.67 Therefore, the retailer has a days-of-supply of inventory of approximately 49 days.