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:

Output

The total amount of goods or services produced by a person, machine, business, country, etc., during a given period.

Economic Profit

The net gain or loss after removing both easily identifiable and not readily apparent expenses from the overall turnover.

Price

The amount of money or compensation given in exchange for goods or services in a market.

Diagram

A simplified representation or drawing that illustrates relationships or processes, often used in economics to demonstrate concepts or data visually.