Maximum inventory level, What is the maximum inventory

Maximum inventory level

Reference no: EM131007655

Epsom Co. manufactures furniture and sells about $40 million a year at a gross margin of 45%.

a. What is the maximum inventory level the firm can carry to maintain an inven- tory turnover (based on COGS) of 8.0?

b. If the inventory contains $1.2 million of obsolete and damaged goods that don't turn over at all, how fast would the active inventory have to turn over to achieve an overall turnover rate of 8.0?

Reference no: EM131007655

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