Question

In: Operations Management

The production order quantity for this problem is approximately 612 units. What is the average inventory for this problem?

a production order quantity problem has a daily demand rate = 10 and a daily production rate = 50. The production order quantity for this problem is approximately 612 units. What is the average inventory for this problem?

 

Solutions

Expert Solution

maximum inventory = Q(1-d/p) 612 x (1-10/50) = 489.6

average inventory = max/2 = 245


The answer is 245.

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