Real-Life Math -- Solution
First, figure out the inventory tax based on current levels.
$22,000,000
x 0.12 = $2,640,000
Now, figure out the maximum inventory
level to meet the tax cap of $1.2 million.
$1.2 million
is 12 percent of X
12X = 1,200,000 x 100
12X = 120,000,000
X
= $120,000,000 / 12
X = $10,000,000
The most you can have
on hand is $10 million.
Now figure out the amount of
reduction.
$22,000,000 - X = $10,000,000
X = $12,000,000
Now
figure out the weekly distribution.
$12,000,000 / 8 weeks
= $1,500,000
You need to sell $1.5 million worth of books
per week to reach the goal. Good thing it's the holiday season!
How
did you do? If you don't like numbers, inventory control probably isn't
your thing. "You need to get a handle on your basic math," says
inventory manager Lynn Davis. "It helps because we're dealing with numbers."