What is the formula for calculating the average transportation inventory (ATI)?
A) ATI = tD / 365/2
B) ATI = tU / 365
C) ATI = tD / 180x2
D) ATI = txD + 365
E) ATI = tD / 365

Question

Quizplus · Accepted Answer

The formula for calculating the average transportation inventory (ATI) is ATI = tD / 365, where t is the transit time in days and D is the demand or shipment quantity. This formula takes into account the number of days that the inventory is in transit, divided by the total number of days in a year (365), to calculate the average amount of inventory that is in transit at any given time. Choice E reflects this formula accurately.

What Is the Formula for Calculating the Average Transportation Inventory