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A company uses 300 units of an item per day and the order lead time is 5 days. What should be the level of inventory when a new order is to be placed?
  • a)
    1500 units 
  • b)
    1000 units
  • c)
    500 units 
  • d)
    2000 units    
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
A company uses 300 units of an item per day and the order lead time is...
The basic formula for calculating ending inventory is: Beginning inventory + net purchases – COGS = ending inventory.
Your beginning inventory is the last period's ending inventory.
The net purchases are the items you've bought and added to your inventory count.
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Community Answer
A company uses 300 units of an item per day and the order lead time is...
The basic formula for calculating ending inventory is: Beginning inventory + net purchases – COGS = ending inventory.
Your beginning inventory is the last period's ending inventory.
The net purchases are the items you've bought and added to your inventory count.
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