If the on hand inventory is 40 units, the safety stock 20 units and the target level is 120 units then an order should be placed for:
A) 100 units
B) 80 units
C) 60 units
D) 40 units
E) 20 units

Question

Quizplus · Accepted Answer

To calculate the order quantity, we need to subtract the current inventory and the safety stock from the target level.

Order Quantity = Target Level - On Hand Inventory - Safety Stock
Order Quantity = 120 - 40 - 20
Order Quantity = 60

Therefore, an order should be placed for 60 units (choice C).

If the on Hand Inventory Is 40 Units, the Safety