43.1k views
5 votes
Carter's Gym Supply currently has an operating cycle of 74.45 days. The company has a goal to increase its inventory turnover from 8.51 times to 9.72 times. What will the company's new operating cycle be if it can achieve this goal

User Manny
by
4.7k points

1 Answer

3 votes

Answer:

69.11 days

Step-by-step explanation:

Cater's gym has an operating cycle of 74.45 days

The company plans to increase inventory from 8.51 times to 9.72 times

Therefore the company's new operating cycle can be calculated as follows

365/8.51

= 42.89 days

365/9.72

= 37.55 days

= 74.45 - 42.89+37.55

= 69.11 days

Hence the company's new operating cycle is 69.11 days

User Krzysiek Karbowiak
by
5.0k points