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Century Outlet has total end-of-year assets of $10 million. The first-of-the-year inventory was
$900,000, with a year-end inventory of $700,000. The annual revenue was $25 million, and the
annual cost of goods sold was $16 million. The owner wants to evaluate his supply chain
performance. Pease calculate the following SC performance measures:
? Gross Margin Percentage =
? Average Inventory Investment =
? Percentage of Assets invested in inventory =
? Inventory turnover =
? Weeks of supply =
Reference Notes:
Gross Margin in $ = Revenue – Cost of Goods Sold
Average Inventory Investment in $ = (Beginning Inventory + Ending Inventory)/2
Percentage of Assets invested in inventory = (Average inventory investment/Total assets) x 100
Inventory turnover in units = Cost of goods sold/Average Inventory investment
Weeks of supply in Inventory in weeks = 52/(Inventory turnover)