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11. (8 points) Consider a periodic review system and suppose that it is time to review the item. On-hand inventory equals 400

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Answer #1

Answer: D (790)

Rationale:

Given, on-hand Inventory (OH) = 400 units

Scheduled Receipts (SR) = 15 units

Backorder (BO) = 405 units

Target inventory level = 800 units

Inventory Position = OH + SR - BO

Inventory Position = 400 + 15 - 405

Inventory Position = 10 units

Therefore,

Quantity to be ordered = Target Inventory level - Inventory Position

Quantity to be ordered = 800 - 10

Quantity to be ordered = 790 units

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