If the order up to level in a periodic review system is 1500 and on hand inventory at the time of the periodic review (when an order is placed) is 300, what is the order quantity? a.1500 b.1800 c.0 d.1200 e.Cannot determine since we need information on review period length

If the order up to level in a periodic review system is 1500 and on hand inventory at the time of the periodic review (when an order is placed) is 300, what is the order quantity?

a.1500

b.1800

c.0

d.1200

e.Cannot determine since we need information on review period length

 

Solution

As per the given data,

The order upto level = Sr = 1500

The inventory at the time of review = Ir = 300

So, the order quantity = Sr-Ir = 1500-300 = 1200 units

So, the answer

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