Question

Zeke runs an elephant sanctuary in Dallas that aims to rehabilitate elephants who have been living in Zoo's for too long. This comes at great cost to Zeke as elephants are costly animals given how much food they eat. Zeke knows that to maintain a healthy elephant diet an elephant must consume 9,030 units of hay each year and Zeke has 6 elephants that all eat year round (365 days). Additionally the annual ordering cost per unit to process an order is $50 and the holding cost of this hay is $11 and lead time is 7 days. Calculate the inventory position right after an order is placed, assume no backordering is allowed. (round your answer to the nearest whole number) _______

Answer 1

The inventory position after placing an order for hay at Zeke's elephant sanctuary is the reorder point minus the forecasted consumption during the lead time, which is 1,039 units (rounded to the nearest whole number).

Step-by-step explanation:

Zeke runs an elephant sanctuary and needs to calculate the inventory position right after an order is placed for elephant hay. To calculate this, we must consider the daily consumption of hay by the elephants and the lead time for an order to arrive.

An elephant must consume 9,030 units of hay each year. With 6 elephants, the total annual consumption is 9,030 units per elephant × 6 elephants = 54,180 units per year. The daily consumption is 54,180 units per year / 365 days = 148.4384 units per day. During the lead time of 7 days, the elephants will consume 148.4384 units per day × 7 days = 1,039.07 units, which we round to 1,039 units.

The inventory position right after an order is placed is the current inventory minus the units that will be consumed during the lead time. If an order is placed when the inventory level reaches a certain reorder point (not given in the problem), the inventory position will be that reorder point minus the 1,039 units that will be consumed during the lead time.