Question

If the on hand inventory is 40 units, the safety stock 20 units and the target level is 120 units

then an order should be placed for:
29)
A) 40 units.
B) 100 units.
C) 80 units.
D) 20 units.
E) 60 units.

Answer 1

The correct order quantity that should be placed is 60 units.

Step-by-step explanation:

To calculate the order that should be placed, we need to consider the on hand inventory, safety stock, and target level. In this case, the on hand inventory is 40 units, the safety stock is 20 units, and the target level is 120 units. To determine the order quantity, we subtract the on hand inventory and safety stock from the target level. So, the order should be placed for (120 - 40 - 20) = 60 units.