Question

It's time to place a new order in a company that uses a Fixed Period (P) system for inventory. Given: Inventory on hand = 15 Orders previously placed but not yet received = 10 Target = 100 Backordered = 0 What quantity should be placed in the new order?

A. 85
B. 90
C. 100
D. 25
E. 75

Answer 1

In a Fixed Period (P) system for inventory, the order quantity is determined by subtracting inventory on hand and pending orders from the target inventory level. In this case, the quantity that should be placed in the new order is 75.

Step-by-step explanation:

In a Fixed Period (P) system for inventory, the order quantity is determined by subtracting the sum of the inventory on hand and orders previously placed but not yet received from the target inventory level.

Using the given information: Inventory on hand = 15, Orders previously placed but not yet received = 10, Target = 100, Backordered = 0.

Therefore, the quantity that should be placed in the new order is 75 (100 - 15 - 10 = 75). So, the correct answer is E. 75.