Discuss the below:
Q: See inventory related information for Dell and HP in the year 2012 below:
|
Types of inventory
|
Dell
|
HP
|
|
Cost of Goods Sold
|
$10,345
|
$21,820
|
|
Production materials (PARTS)
|
$750
|
$3,190
|
|
Work in process inventory (WIP)
|
$400
|
$2,585
|
|
Finished goods inventory (FGI)
|
$465
|
$1,517
|
1. Calculate the days of supply for Dell and HP?
2. HP recently undertook an initiative to be more efficient with their cash. What should be the TOTAL inventory costs (PARTS+WIP+FGI) for HP to have the same number of inventory turns as Dell? (Assume that COGS remains the same and they proportionally cut the inventory costs).