production management 3070452 2

Suppose we have an EOQ inventory system as follows:

[1] Order quantity = 600 units/order
[2] Daily demand = 40 units/day[3] Order lead time = 5 days.

Suppose at the beginning of day 1, there are 600 units ininventory and there is no outstanding order.
In order to avoid shortage, a new replenishment order must
be placed at the end of what day? Why?

 

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