Question

teh manager of quicki mart convinence sotre which is open 350 days per year sells six cases of duff soda each day 2100 cases per year order cost are 10.00 per order the lead time for an order is four days anual holidng cost are equila to 36 per case the manger typically orders 40 cahses each time she places order. If averege deman for an inventory itme is 250 units per day lead time is 40 days and sfety sotck is 200 units what is the reorder point5

Answer 1

the reorder point is 10,200 cases

Step-by-step explanation:

The computation of the reorder point is shown below

Reorder Point (ROP) = Average demand during lead time + Safety stock.

where,

Average demand during lead time

= d × L

= 250 × 40

= 10,000 cases

And,

Safety Stock = 200 units

So,

ROP is

= 10,000 + 200

= 10,200 cases

hence, the reorder point is 10,200 cases