Jimmy's Egg is a specialty restaurant featuring 47 different kinds of omelettes in three different sizes. They use 60 dozen eggs a day that they order from an egg factory with a lead time of five days
One fine day they stock their chiller and note that there are only 25 dozen eggs remaining. They have a backorder of 15 cases and an open order of 200 cases. What is their inventory position? Should they place an order?
IP = OH + SR - BO
IP = 25 + 200 - 15
IP = 210
R = Demand during lead time
R = 60 × 5 = 300
with no safety stock
Their inventory position falls short of their reorder point so they should place an order.
Business
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