Question

Prince Electronics, a manufacturer of consumer electionic goods, has five distribution centens in different regions of the country. For one of its products, a highspeed modem priced at $350 per unit, the average weekly demand in each distribution center is 80 units. Average shipment size to each distribution center is 400 units, and average lead time for delivery is 3 weeks. Each distribution carreir carries 3 weeks supply as safety stock but holds no anticipation inventory.

on average, how many dollars of pipeline inventory will be in transit to each distribution center? $__(Enter your response as an integer)

Answer 1

To calculate the pipeline inventory for Prince Electronics' highspeed modems, we multiply the average weekly demand at each distribution center by the lead time and the price per unit, resulting in $84,000 of inventory in transit on average to each center.

Step-by-step explanation:

The question is asking to calculate the amount of pipeline inventory in transit to each distribution center for Prince Electronics. Pipeline inventory is the amount of inventory that is on its way from the supplier to the company but has not yet arrived. To calculate the pipeline inventory, we need to consider the average weekly demand, the lead time for delivery, and the price per unit of the product.

The average weekly demand is 80 units per distribution center, and the lead time is 3 weeks. Therefore, over the course of 3 weeks, each center will demand 80 units × 3 weeks = 240 units. Since the price per unit is $350, the dollar amount of the pipeline inventory would be 240 units × $350 per unit = $84,000.

So, on average, there will be $84,000 of pipeline inventory in transit to each distribution center.