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Home Q & A Board Other Fields Homework Help Business Economics
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ruskin ruskin
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Posts: 664
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6 years ago
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. The reorder point is 50 units. Safety stocks are set at 94 units.

Required:
a.   Determine the inventory level at the time of reordering.
b.   Determine the purchase order lead time.
d.   Determine the maximum purchase order lead time that the company can experience before it has a stockout.
Textbook 
Cost Accounting: A Managerial Emphasis, Canadian Edition

Cost Accounting: A Managerial Emphasis, Canadian Edition


Edition: 7th
Authors:
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#1
6 years ago
a.   Reorder point         50 units
   Safety stock            94 units
   Inventory at reorder point      144 units

b.   50 units at reorder point/10 units a day = 5 days

c.   Reorder point with safety stocks is 144
   Maximum demand is 12
   Maximum purchase order lead time = 144/12 = 12 days
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