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22 November, 17:46

A production order quantity problem has a daily demand rate = 10 and a daily production rate = 50.

The production order quantity for this problem is approximately 750 units.

What is the average inventory for this problem?

A. 600

B. 245

C. 300

D. 375

E. 61

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Answers (1)
  1. 22 November, 17:54
    0
    C. 300

    Explanation:

    Step 1. Given information.

    daily demand rate = 10. daily production rate = 50. Q is 750.

    Step 2. Formulas needed to solve the exercise.

    maximum inventory = Q (1-d/p)

    Step 3. Calculation.

    612 x (1-10/50) = 600

    Step 4. Solution.

    average inventory = max/2 = 300
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