A retailer uses the weeks' supply method of inventory-level planning.Average weekly sales during a four-month period are forecast to be $10,000; the retailer wants to stock six weeks of merchandise.What should the planned average inventory level be during this period?

Question

Quizplus · Accepted Answer

To calculate the planned average inventory level, we need to multiply the average weekly sales by the number of weeks of stock we want to have.

Planned average inventory level = Average weekly sales x Weeks of stock

Planned average inventory level = $10,000 x 6

Planned average inventory level = $60,000

Therefore, the planned average inventory level during this period should be $60,000.

A Retailer Uses the Weeks' Supply Method of Inventory-Level Planning