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please, i read in BPP study kit that buffer inventory is the same as minimum inventory, also that buffer inventory is the same as safety inventory. please, I want to know which one i should take and is safety inventory calculated as Average inventory – Q/2 ? thanks in advance
buffer inventory means excess inventory
the one you will choose depends on the question you have been asked let’s solve this question together 1.for a particular component the reorder quantity is 6000 units and average inventory holding is 3400 units what is the level of safety inventory solution: average inventory =safety inventory +reorder quantity/2 3400=x+6000/2. x= 400 that’s the excess inventory we have
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