Its weeks of supply last year was = 10
<u>Explanation:</u>
we are given for last year
cost of goods sold was $7.5 million and inventory was $1.5 million
firstly , we will find average cost of sold good on week basis
=cost of goods / total number of weeks in a year
so, we get
average cost of sold good on week basis as :
7.5 by 50 = 0.1442 million
now, we can find weeks supply
Weeks supply=Investment in inventory/ Average cost of sold good on week basis
week supply = 1.5 by 0.1442 =10
so, week supply = 10
we are given for this year
cost of goods sold is $8.6 million and inventory investment is $1.6 million
firstly , we will find average cost of sold good on week basis
=cost of goods / total number of weeks in a year
so, we get
average cost of sold good on week basis as :
=8.6 by 52 = 0.1654 million
now, we can find weeks supply
Weeks supply=Investment in inventory/ Average cost of sold good on week basis
week supply = 1.6/0.1654 =10
so, week supply = 10
