Question
A large retailer with multiple outlets maintains a central warehouse from which the outlets are supplied. The following information is available for Part Number BS420.
A large retailer with multiple outlets maintains a central warehouse from which the outlets are supplied. The following information is available for Part Number BS420.
Average Usage 400 per day
Minimum Usage 160 per day
Maximum Usage 450 per day
Lead time for replenishment 10-14 days
Re-order quantity 7,000 units
Re-order level 6,500 units
Required:
a. Based on the data above, what is the maximum level of inventory?
b. Based on the data above, what is the approximate number of Part Number BS420 carried as buffer inventory?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
a To calculate the maximum level of inventory we use the formula M...
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Intermediate Accounting
Authors: kieso, weygandt and warfield.
14th Edition
9780470587232, 470587288, 470587237, 978-0470587287
