Question

Ketchum & Lushene Hardware sells 100 hammers daily. The supplier takes two days

to deliver more hammers.

At what quantity should the inventory manager place his/her next order?

Answer 1

He should reorder when he is left with 200 hammers.

Step-by-step explanation:

Reorder point is the trigger which informs the businessmen to order the inventory when the stock is used.

Reorder point = Safety Stock + (Average daily usage of units * Average lead time in days )

Reorder Point = 0 + (100 hammers * 2 days)

Reorder Point = 200