Question

A firm manages its inventory with an order-up-to level (i.e., a base stock level). The review period is one day (so the manager makes an order every day), the lead time is two days, and the order-up-to level is 10. Suppose its inventory position at the start of a day (before it submits an order for that day) is -4. Which of the following statements is definitely true? Group of answer choices Demand was four units yesterday. Demand was 10 units yesterday. The firm manager should order 14 units today. The firm manager should order 10 units today.

Answer 1

Answer: The firm manager should order 10 units today

Step-by-step explanation:

Based on the information that have been given in the question, we should note that the number of units in order before it orders today will be 14.

Also, since the order up to level is 10, it simply means that the firm manager cannot order more than 10 units per day which means that option C of 14 units is Incorrect.

The correct answer will be that the firm manager should order 10 units today.