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Dear Sir,
I just finished watching all the lectures in “Inventory Control” and tried the BPP revision kit (ninth edition). And here i am feeling difficulty in finding the answer for the question no.5.2 which says:There are 27,500 units of Part Number X35 on order with the suppliers and 16,250 units outstanding on existing customers’ orders.
If the free inventory is 13,000 units, what is the physical inventory?
……………units
Could you please help me solve this?
Thank You
The free inventory is the number of units they can promise to supply to customers taking into account what they have in inventory at the moment together with what extra inventory they have ordered and are waiting to receive.
At the moment they have already got customers waiting for 16,250 units, and they think that they will be able to accept order from customers for another 13,000 units.
So they think they will be able to supply at the moment a total of 29,250 units.They are waiting for 27,500 to arrive from suppliers, so to be able to supply 29,250 to customers it must mean that they have 1,750 in inventory at the moment.
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