Question

A deli shop has a PAR LEVEL of 10 cases for Swiss cheese, and they have 7 cases right now. Each day the deli uses about 6 cases of cheese, 3 cases are needed for the safety stock, and the lead time for the delivery is 3 days. Using the PAR STOCK METHOD, how many cases of Swiss cheese should the deli shop order?

a. 4
b. 3
c. 21
d. 15

Answer 1

Using the PAR STOCK METHOD, the deli shop should order 15 cases of Swiss cheese.

Step-by-step explanation:

In order to determine how many cases of Swiss cheese the deli shop should order using the PAR STOCK METHOD, we need to consider the safety stock and lead time. The safety stock is 3 cases and the lead time is 3 days. This means that the deli shop needs to have enough cheese to cover 3 days of usage plus the safety stock.

First, calculate the total amount of cheese needed for the lead time and safety stock. Since the deli uses 6 cases of cheese per day, multiply 6 by 3 to get 18 cases for the lead time. Then add the safety stock of 3 cases to get a total of 21 cases needed.

Next, subtract the current inventory of 7 cases from the total needed of 21 cases. This gives us a shortage of 14 cases. Therefore, the deli shop should order 15 cases of Swiss cheese.