If annual demand is 24,000 units, and the order quantity is 3,000 units, then which of the following is true?
A) The annual number of order placements will be 8, and average inventory levels will be 1,500.
B) The annual number of order placements will be 8, and average inventory levels will be 3,000.
C) The annual number of order placements will be 12, and average inventory levels will be 12,000.
D) The annual number of order placements will be 24, and average inventory levels will be 12,000

Question

Quizplus · Accepted Answer

The annual number of order placements is calculated by dividing the annual demand by the order quantity (24,000 / 3,000 = 8). The average inventory level is half of the order quantity (3,000 / 2 = 1,500).

If Annual Demand Is 24,000 Units, and the Order Quantity