An Inventory Item of XYZ Manufacturing Has an Average Daily

question 68

Essay

An inventory item of XYZ Manufacturing has an average daily demand of 10 units with a maximum daily demand of 12 units. The economic order quantity is 200 units. Without safety stocks, the reorder point is 50 units. Safety stocks are set at 94 units.
Required:
a. Determine the reorder point with safety stocks.
b. Determine the maximum inventory level.
c. Determine the average lead time.
d. Determine the maximum lead time.

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Definitions:

Cause And Effect

A relationship between two phenomena where one event (the cause) directly results in another event (the effect).

Prepositional Phrases

Groups of words consisting of a preposition and its object, used to modify nouns, verbs, or adjectives.

Obey

To obey the instructions or orders issued by a person in charge.

Prepositional Phrases

Groups of words in a sentence made up of a preposition and its object, functioning as modifiers or complements.