In: Operations Management
Demand for a product is 400 units per week. Lead time is one week. When inventory level reached 1000 units, the material manager orders 6 weeks of demand. Compute the average inventory.
1000
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None of the above
Order Quantity = 6 weeks of demand
One week of demand = 400 units
6 weeks of demand = 400*6 = 2,400 units
Average Inventory = Order quantity/2 =2400/2 = 1200 units
None of the above is true