Inventory MGMT

Question 1

Reorder point

Answer 1

Average daily demand x avg lead time = reorder w/out safety stock
“^” + safety stock = reorder w/ safety stock

Question 2

Econ Order Quantity

Answer 2

SQ Root ((2 * A * P) / S ))
A = Annual Usage
P = Cost to place order
S = Cost to store

Question 3

Inv Turnover Ratio

Answer 3

COGS / Avg Inv

Question 4

days of supply in avg inv

Answer 4

365* / Inv turnover