Barington Mills manufactures denim cloth from two primary raw materials, cotton and dye. Work-in-process includes lapped cotton, spun yarn, and undyed cloth, while finished goods include three grades of dyed cloth. The average inventory amounts on hand at any one time last year and the unit costs are as follows.10-5. 10-6. Year 1 2 3 4 Raw Materials Average Inventory Unit Cost Cotton Dye Lapped cotton Spun yarn Undyed cloth Grade 1 cloth Grade 2 cloth Grade 3 cloth 70,000 lb. 125,000 gal. 2000 rolls 5000 spools 500 rolls 250 rolls 190 rolls 310 rolls $2.75 5.00 $10.50 6.75 26.10 $65.00 80.00 105.00 Component parts Work-in-process Finished computers Cost of goods sold $20.5 27.8 30.8 4.2 6.7 7.1 3.6 7.2 8.6 226.0 345.0 517.0 37.3 9.5 10.1 680.0 days of supply Work-in-Process
a. Determine the number of inventory turns and the for each year.
b. As the company has grown, does it appear that the company’s supply chain performance has improved? Explain your answer.
c. If the company wants to improve its supply chain performance, what items should it focus on? Why?