A large retailer with multiple outlets maintains a central warehouse from which the outlets are supplied. The
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Question:
A large retailer with multiple outlets maintains a central warehouse from which the outlets are supplied. The following information is available for Part Number BS420.
Average Usage 400 per day
Minimum Usage 160 per day
Maximum Usage 450 per day
Lead time for replenishment 10-14 days
Re-order quantity 7,000 units
Re-order level 6,500 units
Required:
a. Based on the data above, what is the maximum level of inventory?
b. Based on the data above, what is the approximate number of Part Number BS420 carried as buffer inventory?
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