Question

An auto repair shop orders cleaning rags in batches of 120 boxes. This inventory is depleted at a constant rate and new rags are ordered to arrive exactly when the on-hand inventory of rags reaches zero boxes. What is the average inventory level over time

Answer 1

60

Step-by-step explanation:

the computation of the average inventory level over time is given below:

As the order is placed only when the inventory level is zero

So, The average inventory level is

= (120 +0) ÷ 2

= 60

Hence, the average inventory level over time is 60

The same would be considered and relevant

Basically we take an average of it to determine the average inventory level