Consideration when determining target inventory levels

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Reference no: EM132277583

Another profitable facet of CKG Auto’s business is supplying parts for auto repairs. The most critical component of the parts supply business is having enough of the right parts on hand so that repair shops can receive same-day delivery. The key to profits is minimizing the number of parts that need to be warehoused while also ensuring that sufficient parts are on hand to meet orders. Because each warehouse distribution center serves a different set of customers with different needs, each center must be considered separately. Distribution centers have a five-day lead time for ordering parts. The lead time must be taken into consideration when determining target inventory levels.

Reference no: EM132277583

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