Answer:
(A)
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 :
=\frac{7.5}{52}= 0.1442 million
now, we can find weeks supply
Weeks supply=Investment in inventory/ Average cost of sold good on week basis
week supply = 1.5/0.1442 =10
so, week supply = 10 ...........Answer
(B)
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 :
=\frac{8.6}{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 ...........Answer
(C)
yes , reduced by 7%
