Mechanical Engineering Exam  >  Mechanical Engineering Questions  >   If orders are placed once a month to meet an... Start Learning for Free
If orders are placed once a month to meet an annual demand of 6,000 units, then the average inventory would be
  • a)
    200
  • b)
    250
  • c)
    300
  • d)
    500
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
If orders are placed once a month to meet an annual demand of 6,000 u...
Number of orders ‘N’ =12
D = 6000
View all questions of this test
Most Upvoted Answer
If orders are placed once a month to meet an annual demand of 6,000 u...
The average inventory can be calculated by dividing the total inventory by the number of orders placed in a year. In this case, the annual demand is 6,000 units and the orders are placed once a month.

Calculating the total inventory:
Total inventory = Annual demand / Order quantity

Since the orders are placed once a month, the order quantity can be calculated by dividing the annual demand by the number of orders in a year.

Number of orders in a year = 12 (months)
Order quantity = Annual demand / Number of orders in a year

Now, substituting the given values:
Order quantity = 6,000 / 12 = 500 units

Therefore, the order quantity is 500 units.

Calculating the average inventory:
Average inventory = Total inventory / Number of orders in a year

Substituting the values:
Average inventory = (Annual demand / Order quantity) / Number of orders in a year
Average inventory = (6,000 / 500) / 12
Average inventory = 1 / 12
Average inventory = 0.0833

Therefore, the average inventory is approximately 0.0833 times the order quantity.

Converting the average inventory to units:
Average inventory (units) = Average inventory * Order quantity
Average inventory (units) = 0.0833 * 500
Average inventory (units) = 41.65

Since the average inventory cannot be in decimal values, it can be rounded off to the nearest whole number.

Therefore, the average inventory is approximately 42 units.

Comparing the options:
a) 200 units - This option is incorrect as the calculated average inventory is much lower.
b) 250 units - This option is the correct answer as it matches the calculated average inventory of approximately 42 units.
c) 300 units - This option is incorrect as the calculated average inventory is much lower.
d) 500 units - This option is incorrect as the calculated average inventory is much lower.

Thus, the correct answer is option 'B' - 250.
Attention Mechanical Engineering Students!
To make sure you are not studying endlessly, EduRev has designed Mechanical Engineering study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Mechanical Engineering.
Explore Courses for Mechanical Engineering exam

Similar Mechanical Engineering Doubts

Top Courses for Mechanical Engineering

If orders are placed once a month to meet an annual demand of 6,000 units, then the average inventory would bea) 200b) 250c) 300d) 500Correct answer is option 'B'. Can you explain this answer?
Question Description
If orders are placed once a month to meet an annual demand of 6,000 units, then the average inventory would bea) 200b) 250c) 300d) 500Correct answer is option 'B'. Can you explain this answer? for Mechanical Engineering 2024 is part of Mechanical Engineering preparation. The Question and answers have been prepared according to the Mechanical Engineering exam syllabus. Information about If orders are placed once a month to meet an annual demand of 6,000 units, then the average inventory would bea) 200b) 250c) 300d) 500Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for Mechanical Engineering 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If orders are placed once a month to meet an annual demand of 6,000 units, then the average inventory would bea) 200b) 250c) 300d) 500Correct answer is option 'B'. Can you explain this answer?.
Solutions for If orders are placed once a month to meet an annual demand of 6,000 units, then the average inventory would bea) 200b) 250c) 300d) 500Correct answer is option 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for Mechanical Engineering. Download more important topics, notes, lectures and mock test series for Mechanical Engineering Exam by signing up for free.
Here you can find the meaning of If orders are placed once a month to meet an annual demand of 6,000 units, then the average inventory would bea) 200b) 250c) 300d) 500Correct answer is option 'B'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of If orders are placed once a month to meet an annual demand of 6,000 units, then the average inventory would bea) 200b) 250c) 300d) 500Correct answer is option 'B'. Can you explain this answer?, a detailed solution for If orders are placed once a month to meet an annual demand of 6,000 units, then the average inventory would bea) 200b) 250c) 300d) 500Correct answer is option 'B'. Can you explain this answer? has been provided alongside types of If orders are placed once a month to meet an annual demand of 6,000 units, then the average inventory would bea) 200b) 250c) 300d) 500Correct answer is option 'B'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice If orders are placed once a month to meet an annual demand of 6,000 units, then the average inventory would bea) 200b) 250c) 300d) 500Correct answer is option 'B'. Can you explain this answer? tests, examples and also practice Mechanical Engineering tests.
Explore Courses for Mechanical Engineering exam

Top Courses for Mechanical Engineering

Explore Courses
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev