Answer:
300 units
Explanation:
Given:
Daily demand rate, d = 10
Daily production rate, p = 50
Production order quantity, Q = 750
Required:
Find the average inventory
First find the maximum inventory using the formula:
[tex] I_m_a_x = \frac{Q}{p}(p-d) [/tex]
[tex] =\frac{750}{50} (50 - 10) [/tex]
[tex] = 15 * 40 [/tex]
[tex] = 600 [/tex]
Now find the average inventory using the formula:
[tex] I_a_v_g = \frac{I_m_a_x}{2} [/tex]
[tex] = \frac{600}{2} = 300 [/tex]
The average inventory for this problem is 300 units
