Consider a periodic review system with a lead time of two weeks and a review period of seven weeks. If the average demand per week is 1000 units and 300 units of safety stock are held, what should the target inventory level be?
A)7300
B)1300
C)9000
D)9300
E)3300

Question

Quizplus · Accepted Answer

Using the periodic review system formula, we can calculate the target inventory level as:

Target Inventory Level = (Average Weekly Demand x Review Period) + Safety Stock

Target Inventory Level = (1000 units/week x 7 weeks) + 300 units
Target Inventory Level = 7000 units/week + 300 units
Target Inventory Level = 7300 units

Therefore, the correct answer is D) 7300.

Consider a Periodic Review System with a Lead Time of Two