ACCA MA · Chapter 4 · Question 4 of 11
A company has a reorder level of 6,000 units and a reorder quantity of 5,000 units. Daily usage is between 300 and 500 units, and lead time is between 8 and 12 days. What is the maximum inventory level?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) 8,600 units
Explanation
Maximum level = reorder level + reorder quantity - (minimum usage x minimum lead time) = 6,000 + 5,000 - (300 x 8) = 11,000 - 2,400 = 8,600 units.
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