An operation uses one case of tomato sauce per day and has a par level of three cases. Orders are made once a week. Today is order day, and there are three cases left. How many should be ordered?

An operation uses one case of tomato sauce per day and has a par level of three cases. Orders are made once a week. Today is order day, and there are three cases left. How many should be ordered?

• A. Five
• B. Seven
• C. Three
• D. Ten

Answer: (B)

Maintaining the par level across a weekly ordering cycle. You use one case per day, so the week’s demand is seven cases. Today is order day and you have three cases on hand. If you order Q today (and it arrives today), your starting stock becomes 3 + Q. Over the next seven days you’ll use 7 cases, so your stock at the end of the week will be (3 + Q) − 7. To finish with the par level of three cases, set (3 + Q) − 7 = 3 and solve for Q: Q = 7. So you should order seven cases. If you tried five, you’d end the week with 1 case, which is below the par; three would run out before week’s end; ten would leave you with six on hand, above the par.

Maintaining the par level across a weekly ordering cycle. You use one case per day, so the week’s demand is seven cases. Today is order day and you have three cases on hand. If you order Q today (and it arrives today), your starting stock becomes 3 + Q. Over the next seven days you’ll use 7 cases, so your stock at the end of the week will be (3 + Q) − 7. To finish with the par level of three cases, set (3 + Q) − 7 = 3 and solve for Q: Q = 7.

So you should order seven cases. If you tried five, you’d end the week with 1 case, which is below the par; three would run out before week’s end; ten would leave you with six on hand, above the par.