1a. Suppose that there are 91 days in a quarter. Starbucks reported a total inventory...
1a. Suppose that there are 91 days in a quarter. Starbucks reported a total inventory of
$1,354,600,000 and a total cost of goods sold of $10,174,500,000 for the 1st quarter in FY’19. Approximately how many days can we expect Starbucks to turn over it’s entire inventory?
A. 12 days
B. 24 days
C. 48 days
D. 96 days
1b. Assume there are 91 days in a quarter. In the fourth quart of FY’18, McDonalds had
$69,647,000,000 in accounts payable while they also had $385,301,000,000 in cost of goods sold. How many days did it take McDonalds to approximately pay it’s bills?
A. 8 days
B. 16 days
C. 32 days
D. 64 days
1c. Which of the following is not driver of supply chain performance?
A. The customer’s tastes and preferences.
B. Where facilities are located.
C. The level of inventories.
D. The prices set by the firm.
1d. A firm can direct it’s supply chain strategy to increase it’s return on assets by either in- creasing it’s profit margin or it’s
A. Inventory Turnover
B. Accounts Receivables Turnover
C. Asset Turnover
D. Cash to Cash Cycle
Homework Answers
1a: Total Inventory = $1,354,600,000
Cost of Goods Sold (COGS) = $10,174,500,000
Number of days: 91 days.
DSI (Days of Inventory) = Inventory / Average per day COGS = ($1,354,600,000 / $10,174,500,000) * 91 =12 days
Hence the correct answer is: A:12 days
1b: Cost of Goods Sold (COGS) = $385,301,000,000
Accounts Payable (AP) = $69,647,000,000
Number of days: 91 days
Hence DPO (Days payable outstanding) = AP/ Average per day COGS =($69,647,000,000 / $385,301,000,000) * 91 =16 days. Hence the correct answer is: B:16 days.
1c: All factors, except Customer's Taste and Preference, affect supply chain performance. Location of facilities, Inventory levels, and Pricing are the major factors affecting the performance of a supply chain. Hence the correct answer is: A
1d: Return on Assets (ROA) = Profit Margin X Asset Turnover Ratio. Hence in order to increase it's ROA, either profit margin can be increased or Asset Turnover Ratio can be increased. Hence the correct answer is: C
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1a. Suppose that there are 91 days in a quarter. Starbucks reported a total inventory...
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