This is the maximum level of inventory that will be held after a shipment is received. See the correct answer for a complete explanation.
This answer does not take into account the safety stock. See the correct answer for a complete explanation.
This answer assumes that the EOQ is 250 units and that the company holds no safety stock. See the correct answer for a complete explanation.
Given that Edwards maintains a 50 unit safety stock, every time the next shipment of inventory is received, there are 50 units in hand. This means that the lowest level of inventory is 50 units. As soon as the order of inventory is received, the level of inventory increases to 250 units, so this is the highest level of inventory. Adding these two amounts together and dividing by 2 will give us the average inventory level of 150 units.
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