Consider a periodic review system. The target inventory level is 1000 units. It is time to review the item, and the on-hand inventory level is 200 units. How many units should be ordered?a.1200b.1000c.800d.the EOQ amount
Question
Consider a periodic review system. The target inventory level is 1000 units. It is time to review the item, and the on-hand inventory level is 200 units. How many units should be ordered?a.1200b.1000c.800d.the EOQ amount
Solution
In a periodic review system, the goal is to maintain the target inventory level. In this case, the target inventory level is 1000 units. Currently, there are 200 units on hand. Therefore, to reach the target inventory level, you need to order enough units to make up the difference.
The calculation is as follows:
Target inventory level - On-hand inventory level = Number of units to order
So,
1000 units (target) - 200 units (on-hand) = 800 units
Therefore, you should order 800 units. So, the answer is c. 800.
Similar Questions
Consider a periodic review system with a lead time of two weeks and a review period of seven weeks. If the average demand per week is 1000 units and 300 units of safety stock are held, what should the target inventory level be?a.1300b.9000c.9300d.7300
If monthly demand is 1,000 units, the ordering cost is $20 per order, and the holding cost is $1.50 per unit per year, which of the following is the optimal order quantity using EOQ model? Group of answer choices 320000 565.68 320 556.68 56.56
A company's annual demand for a certain material is 6,000 units. The ordering cost is $150 per order, and the holding cost is $5 per unit per year. What is the Economic Order Quantity (EOQ)?Question 10Answera.300 unitsb.400 unitsc.500 unitsd.600 units
Calculate the EOQ based on the following information: 21 000 units used annually, purchased at R65 per unit. Order cost is R340 per order. Carrying cost is 9% of inventory value.a.1 633 unitsb.1 614 unitsc.1 599 unitsd.1 562 units
1. If the annual requirement is 24,000 units for an item ordering cost is Rs. 200 per order and EOQ = 2000 units with price per unit of the item Rs. 20 then the annual carrying cost per unit is
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.