Question

In: Operations Management

A retailer stocks an item that has an annual demand of 2400 units. The retailer uses...

A retailer stocks an item that has an annual demand of 2400 units. The retailer uses an order quantity of 300 units.

For this item the retailer carries an average inventory of X units and places Y orders annually.

X= 150 units; Y=8 orders

X=1200 units; Y = 8 orders

X=300 units; Y = 16 orders

X = 1200 units; Y = 2 orders

0.67

0.33

Solutions

Expert Solution

It is to be noted :

Average inventory = Order quantity / 2

Number of orders annually = Annual demand/ order quantity

Therefore ,

Average inventory =   300/2 = 150

Number of orders annually = 2400/300 = 8

Answer : X = 150 units , Y = 8 orders

keosha answered 2 years ago
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