A regional warehouse orders items once a week from a central warehouse. Thetruck arrives 3 days after the order is placed. The warehouse operates 5 days aweek. For a particular brand and size of chicken soup, the demand is fairly steadyat 20 cases per day. Safety stock is set at 2 days’ supply.a. What is the target level?b. If the quantity on hand is 90 cases, how many should be ordered?

Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
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Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
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A regional warehouse orders items once a week from a central warehouse. The
truck arrives 3 days after the order is placed. The warehouse operates 5 days a
week. For a particular brand and size of chicken soup, the demand is fairly steady
at 20 cases per day. Safety stock is set at 2 days’ supply.
a. What is the target level?
b. If the quantity on hand is 90 cases, how many should be ordered?

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