Business – 4.2 Inventory management – Managing inventory | e-Consult
4.2 Inventory management – Managing inventory (1 questions)
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Points that lie outside the control limits signal a loss of statistical control.
- Week 3 records 152 units, which exceeds the UCL of 150. This suggests over‑stocking, possibly due to an unusually large production batch or delayed sales.
- Week 8 records 38 units, which falls below the LCL of 40. This indicates a stock‑out risk, likely caused by higher than expected demand or a delay in replenishment.
All other weeks (1, 2, 4, 5, 6, 7) fall within the control limits, showing normal variation. Because there are two points outside the limits, the inventory system is not in statistical control. Management should investigate the causes of the extreme values and adjust ordering or production policies accordingly.