Annual Target Order Item On-Hand Demand Level Quantity Nut – 6 mm 500 22 Nut – 8 mm 750 54 Bolt – 6 mm 200 Bolt – 8 mm 100 6. Screw #8 - 30 mm 250 12 Screw #8 - 40 mm 200 8. Washer - 8 mm 380 20 Washer - 10 mm 100 5 Pin – Split 400 40
Annual Target Order Item On-Hand Demand Level Quantity Nut – 6 mm 500 22 Nut – 8 mm 750 54 Bolt – 6 mm 200 Bolt – 8 mm 100 6. Screw #8 - 30 mm 250 12 Screw #8 - 40 mm 200 8. Washer - 8 mm 380 20 Washer - 10 mm 100 5 Pin – Split 400 40
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
A small hardware store uses a periodic review system to control inventory and
calculate order quantities. Inventory is reviewed every 2 weeks and there is a
1-week lead time for delivery. Safety stock is set at 1 week’s supply. The following
table shows the products and the current on-hand inventory. Calculate the target
level and order quantity for each of the items. Use 50 weeks per year for your
calculations.
Transcribed Image Text:Annual
Target
Order
Item
On-Hand
Demand
Level
Quantity
Nut – 6 mm
500
22
Nut – 8 mm
750
54
Bolt – 6 mm
200
Bolt – 8 mm
100
6.
Screw #8 - 30 mm
250
12
Screw #8 - 40 mm
200
8.
Washer - 8 mm
380
20
Washer - 10 mm
100
5
Pin – Split
400
40
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