Exhibit 12.26 gives the daily demand of a certain oil filter at an auto supply store. Illustrate

Question:

Exhibit 12.26 gives the daily demand of a certain oil filter at an auto supply store. Illustrate the operation of a fixed-order-quantity inventory system by graphing the inventory level versus time if Q = 40, R = 15, and the lead time is three days. The beginning inventory on day one is 30 units. Assume that orders are placed at the end of the day and that they arrive at the beginning of the day. Therefore, if an order is placed at the end of day five, it will arrive at the beginning of day nine. Assume that 30 items are on hand at the start of day one. Use Equation 12.1 to evaluate the inventory position and when to place orders.