A production order quantity problem has a daily demand rate = 10 and a daily production rate = 50. The production order quantity for

A production order quantity problem has a daily demand rate = 10 and a daily production rate = 50. The production order quantity for this problem is approximately 612 units. What is the average inventory for this problem?

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: A A A A Now find the average inventory using the formula: A A The average inventory for this problem is 300 units

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