1A Suppose That There Are 91 Days In A Quarter

Question

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

Solutions

Expert Solution

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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