Final answer:
To determine the reorder point for the specialty item, consider the lead time and average daily demand. Multiply the average daily demand by the lead time to calculate the reorder point.
Step-by-step explanation:
To determine the reorder point for the specialty item, we need to consider the lead time and the demand during that time. In this case, the lead time is constant at five days. The store is open for 300 days a year.
To calculate the reorder point, we need to determine the average daily demand and multiply it by the lead time. Let's say the average daily demand is 10 units.
The reorder point would be 10 units multiplied by 5 days, which equals 50 units.
Therefore, the store should reorder the item when the inventory reaches 50 units to ensure it remains in stock and available for customers.