Question

If an on-hand inventory is 50 units, a scheduled receipt of 300

units is pending, and backorders are 50 units, should a new order
be placed? (assuming that reorder point R = 200 units)
Answer choices:
A.Yes, because IP > R
B.No, because IP > R
C.Yes, because IP < R
D.No, because IP < R
E.Yes, because IP = R

Answer 1

No, because IP > R

Step-by-step explanation:

In this case, the **inventory position (IP)** can be calculated by adding the on-hand inventory, scheduled receipt, and subtracting the backorders. So, IP = on-hand inventory + scheduled receipt - backorders = 50 + 300 - 50 = 300.

Since the reorder point (R) is given as 200 units and the inventory position (IP) is higher than the reorder point (IP > R), a new order does not need to be placed.

Therefore, the correct answer is **B. No, because IP > R**.