Question

In: Operations Management

1. What is your firm's Inventory Turnover if you have $200,000 cost of goods sold, raw...

1. What is your firm's Inventory Turnover if you have $200,000 cost of goods sold, raw material inventory of $10,000, finished goods inventory of $15,000 and annual sales of $400,000?

a 8

b 16

c 13.3

d 20

2.

Which of the following statements describes "level" operating strategy?

Group of answer choices

A planning strategy sets production equal to forecast demand

Maintaining constant production regardless of demand

Used two or more startegies to match production to demand

None of the above

Expert Solution

1.Answer: b; 16

Inventory turnover= Cost of goods sold/ average inventory investment

Cost of goods sold= $200,000

Average inventory investment=( raw material inventory+ finished goods inventory)/2

= (10,000+15,000)/2 = $,12500

Hence inventory turnover= 200,000/12500 = 16

2. Answer: Maintaining constant production regardless of demand

Explanation:

Level strategy is the one that maintains steady rate of output while meeting variations on demand. Hence level operating strategy is best described as maintaining constant production regardless of demand. A planning strategy that sets production equal to forecast demand is a chase strategy. A mixed strategy uses two or more strategies to match production to demand. Hence other options are wrong.

keosha answered 2 weeks ago

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