Consider a Periodic Review System with a Lead Time of Two

question 64

Multiple Choice

Consider a periodic review system with a lead time of two weeks and a review period of seven weeks. If the average demand per week is 1000 units and 300 units of safety stock are held, what should the target inventory level be?

• A) 7300
• B) 1300
• C) 9000
• D) 9300
• E) 3300

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Definitions:

Comparative Balance Sheet

Financial statement showing a company's assets, liabilities, and equity at two or more points in time, allowing for comparative analysis.

Accumulated Depreciation

The total depreciation amount that has been charged against a fixed asset since it was put into use.

Investing Activities

Transactions and events related to the acquisition and disposal of long-term assets and other investments not considered as cash equivalents.

Cash Dividend

A payment made by a company to its shareholders, usually in the form of cash, as a share of the profits.