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What is the value of the average inventory being held by the distribution center?

Question

What is the value of the average inventory being held by the distribution center?

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Solution

To calculate the average inventory held by the distribution center, you would need specific data which is not provided in your question. However, I can explain the general steps to calculate it:

  1. Determine the Beginning Inventory: This is the inventory count at the start of a specific period.

  2. Determine the Ending Inventory: This is the inventory count at the end of that same period.

  3. Calculate Average Inventory: Add the beginning inventory to the ending inventory, then divide by 2.

Formula: Average Inventory = (Beginning Inventory + Ending Inventory) / 2

Please note that this is a simplified calculation. In a real-world scenario, inventory levels can fluctuate significantly throughout a period, so a more accurate average might involve taking inventory counts at regular intervals and averaging those.

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