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    Question

    PQR Ltd consumes a minimum of 1250 units in 4 weeks

    while the average rate of consumption per week is 625 units. If it takes 4 weeks on average for the supplier to deliver the inventory, what should be the re-order level for PQR Ltd?
    A 1250 Correct Answer Incorrect Answer
    B 2500 Correct Answer Incorrect Answer
    C 3750 Correct Answer Incorrect Answer
    D 5000 Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Re-order level = Minimum Stock + (Average consumption * average delivery time)                         = 1250 + (625*4)                         = 3750

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