Question

For a given store, demand in Week 5 is 375, and on-hand inventory at the end of Week 4 is 450. If the manufacturing lead time for this particular item is two weeks, which of the following statements will be true?

a) the order release for Week 2 will be 450
b) the order release for Week 3 will be 0
c) the order release for Week 3 will be 375
d) the order release for Week 4 will be 0

Answer 1

The order release for Week 3 will be 0.

Step-by-step explanation:

To determine the order release for Week 3, we need to consider the manufacturing lead time of two weeks. The on-hand inventory at the end of Week 4 is 450, and the demand in Week 5 is 375. This means that the order release for Week 3 should be equal to the demand in Week 5 minus the on-hand inventory at the end of Week 4, which is 375 - 450 = -75. However, the order release cannot be negative, so the correct option would be: