Sales of cars at a local auto dealer total 3000 cars per yea

Sales of cars at a local auto dealer total 3000 cars per year. The dealer reports inventory turns of 30 per year. Compute the following: Average inventory in the dealer’s lot The length of time the average car sits in the dealer lot before it is sold Suppose the dealer wants to increase his customer responsiveness. What actions should he take? How will these actions impact inventory turns, average inventory, days of inventory, and supply chain cost..?

Solution

So to increase customer responsiveness

With these

inventory turns will increase, as more sales and higher turn over

average inventory will drop, as the sales will be more the inventory staying idle wiill become less

days of inventory will be less as higher churn of cars is required

and supply chain cost will go up, due to higher demand and faster movements.