Question

Advanced Machine Company averaged $3 million in inventory last year, and the cost of goods sold was $12 million. The best inventory turnover in the company's industry is five turns per year. The company has 52 business weeks per year. In blank

How many weeks of supply were held in inventory?

Answer 1

The weeks of supply held in inventory is 13 weeks.

Step-by-step explanation:

To calculate the weeks of supply held in inventory, we need to use the formula:

Weeks of Supply = 52 / Inventory Turnover.

Inventory turnover is the ratio of cost of goods sold to average inventory.

In this case, the cost of goods sold is $12 million and the average inventory is $3 million, so the inventory turnover is 4.

Hence, the weeks of supply held in inventory is 52 / 4 = 13 weeks.