The McDonald’s fast-food restaurant on campus sells an average of 6,400 quarter-pound hamburgers each week. Hamburger patties are resupplied twice a week, and on average the store has 645 pounds of hamburger in stock. Assume that the hamburger patties cost $2 a pound and there are 52 weeks in a year. a. What is the inventory turnover for the hamburger patties? (Do not round intermediate calculations. Round your answer to 1 decimal place.) b. On average, how many days of supply are on hand? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Answers are in BOLD
Average sales per week | 6400 | hamburgers | ||
weight | 0.25 | lbs | ||
No. of weeks | 52 | weeks | ||
Cost per pound weight | $2.00 | |||
Avg. inventory | 645 | lbs | ||
COGS | Avg sales per week*no. of weeks*weight*cost per pound | $166,400 | ||
Answer a | Inventory turnover | COGS/(Avg. inventory*cost per pound) | 129.0 | turns per year |
no. of days= | 52*7 | 364 days | ||
Answer b | days of supply | [(Avg. inventory*cost per pound)/COGS]*364 days | 2.83 | days |
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