What is the effect on the average cycle inventory and pipeline inventory of a distribution center? With the need to comment on the results.

Economics Today and Tomorrow, Student Edition
1st Edition
ISBN:9780078747663
Author:McGraw-Hill
Publisher:McGraw-Hill
Chapter5: Buying The Necessities
Section: Chapter Questions
Problem 20AA
icon
Related questions
Question
i need the answer quickly
A factory ships weekly shipments of an item to a distribution center and the average
quantity shipped is 350 units. The average weekly demand for this distribution
center is 50 units for an item. Unit price is $650. The supply period from the factory
to the distribution center is two weeks (2 weeks). The distribution center must pay
for the inventory from the moment the factory ships the goods. If the distribution
center wants to increase the purchase quantity to 400 units, the factory will give
priority to the distribution center and guarantee it Supply period (one week only).
What is the effect on the average cycle inventory and pipeline inventory of
a distribution center? With the need to comment on the results.
Transcribed Image Text:A factory ships weekly shipments of an item to a distribution center and the average quantity shipped is 350 units. The average weekly demand for this distribution center is 50 units for an item. Unit price is $650. The supply period from the factory to the distribution center is two weeks (2 weeks). The distribution center must pay for the inventory from the moment the factory ships the goods. If the distribution center wants to increase the purchase quantity to 400 units, the factory will give priority to the distribution center and guarantee it Supply period (one week only). What is the effect on the average cycle inventory and pipeline inventory of a distribution center? With the need to comment on the results.
Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Comparative Advantage
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Economics Today and Tomorrow, Student Edition
Economics Today and Tomorrow, Student Edition
Economics
ISBN:
9780078747663
Author:
McGraw-Hill
Publisher:
Glencoe/McGraw-Hill School Pub Co