Quiz_ Abbey case quiz

# Quiz_ Abbey case quiz - uiz Abbey case quiz...

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Abbey case quiz Submitted by cmd5150 on 3/19/2010 9:12:37 PM Points Awarded 10 Points Missed 0 Percentage 100% 1. What is the total inventory level in dollars? You can calculate this based on data given in the case... hint: annual inventory carrying cost = total inventory * carrying cost percentage. (SHOW YOUR CALCULATIONS) Points Earned: 2/2 Correct Answer: 2.5 million = X * 20% X = 12.5 million dollars Total inventory level = 12.5 million dollars Your Response: TI = AICC/CCP (\$2.5 Mil)/(.20)= \$12,500,000 2. Calculate inventory turns. Assume COGS represents 50% of revenues. (Show calculation) Points Earned: 2/2 Correct Answer: Inventory Turns = Cost of goods sold/ Total inventory; Cost of goods sold = 50% of 50 million = 25 million; Inventory Turns = 25 million/ 12.5 million = 2 Your Response: IT = COGS/Inventory =(.50*Revenue)/(Inventory) =(.50*\$50 mil)/(\$12.5 mil) = 2 3. Explain the meaning of the inventory turns number calculated in the above question, and also explain if the turns number is good or bad and why.

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