Question

Consider a periodic review system. The target inventory level is 1000 units. It is time to review the item, and the on-hand inventory level is 200 units. How many units should be ordered?

a) 800

b) 1000

c) 1200

d) the EOQ amount

e) the safety stock amount

Answer 1

The answer is - a) 800

Explanation:

In a periodic review system, we calculate the quantity of an item, a company has on hand at specified and fixed interval of time.

Given is : The target inventory level is 1000 units and the on-hand inventory level is 200 units.

So, the quantity will be =
`1000-200=800` units.

The answer is option A.