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Please help me with the following question:
Steve Pope runs a small manufacturing business which requires, on average, 40 litres of liquid Q each week. Steve reviews inventory level every 3 weeks and then places an order to replenish the inventory level held up to a maximum of 150 litres. It usually takes 2 weeks for liquid Q to arrive from suppliers. Today he has reviewed inventory level of liquid Q and discovered that 90 litres of liquid Q remain.
Calculate how many litres of liquid Q should Steve order.
Your help is much appreciated.
It will take 2 weeks for the new order to arrive, and during those two weeks he will have used 2 x 40 = 80 litres. So when the new order arrives he will only have 90 – 80 = 10 litres left.
Since he wants the new order to bring the level up to 150 litres, he needs to order 150 – 10 = 140 litres.
(In future, if you want me to answer then ask in the F2 Ask the ACCA Tutor Forum 🙂 )
Thank you so much sir I truly appreciate your help. I will keep that in mind. I can’t tell you how much I value your help. 😀
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