Question

Bay Plus Outlet has total end-of-year assets of $5 million. The average inventory holding in the outlet was $500,000. The annual cost of goods sold was $7 million. The owner of the Bay Plus Outlet wants to evaluate her supply performance using this data and compare them with her competitors. What is Bay Plus Outlet’s weeks of supply?

3.71

5.20

0.71

None of the other choices

0.07

Answer 1

Average inventory = $ 500,000

Cost of goods sold = $ 7,000,000

Weeks of supply = Average inventory * 52 / cost of goods sold

= (500,000 * 52) / 7,000,000 = 3.71

Hence, the correct option is a 3.71

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