|weekly average inventory/Planned Orders||1000||1000||1000||1000||1000||1000||1000||1000|
|Assumption made; week made of 5 days (week days)|
Daily demand = 200 units per day
Weekly supply = 200 * 5 =1000 units assuming 5 days in a week. This is the base stock level demand. In a week 1000 units ought to be available in stock in readiness to the week’s orders.
For a Fill Factor of 100%, the received units must be equal to the number of units demanded. This means that there will be no surplus or shortage.
Beginning Inventory =0 units
Fill factor rate is 100 %
Shortage of the units on demand is not acceptable at the end of every week.
NB; to better understand this, consideration is first made to the initial week. Suppose for that week, the planned supply would be 1000 units, and the weekly demand is 1000 units, and the starting inventory is 0 units, the end inventory for that week would thus be 0+1000-1000 = units. The units delivered within the week have ready demand.