It is week 1 and there are currently 20 as in stock. we need 300 as at the start of week 5. if there are scheduled receipts planned for week 3 and week 4 of 120 as each and a has a lead time of 1 week, when and how large of an order should be placed to meet the requirement of 300 as?

An order of 40As should be placed to meet the requirement of 300 As at Week 4

Explanation:

Given

Current Week: Week 1

Stock: 20 As

End Week: Week 5

Stock: 30 As

Activities within the week are as follows:

In the question, there's no planned receipt for week 2;

So, the data entry for week 2 is

Week 2:

Stock: 0 As

There are scheduled receipts planned for week 3 and week 4 of 120 As each;

Week 3:

Stock: 120 As

Week 4:

Stock: 120 As

Since the End week is week 5 and at this point there are (20 + 0 + 120 + 120) As in stock;

To balance the stock, there's a need for 300 As - (20 + 0 + 120 + 120) As

= 40 As.

So, Week 5 Entry is as follows;

Week 5:

Stock: 50 As

Tabulate the above findings in a table;

Week         Quantity        Accumulated Quantity

  1                    20                          20

  2                      0                          20

  3                  120                          140

  4                  120                         260

  5                   40                         300

The Accumulated Quantity stands as the cumulative frequency of the table.

It is stated that, the expectant week is week 5 and there's a lead time of 1 week.

So, the order should be placed at

Week (5 - 1)

The order should be placed at week 4

The Size of order to be placed = Total Requirement - Accumulated Quantity at Week 4

Size of order to be placed = 300 - 260

Size of order to be placed = 40.

Conclusively, an order of 40As should be placed to meet the requirement of 300 As at Week 4

the answer is a. $209,000

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