Question

Primetime Incorporated is a retailer of sporting gear. It sells 500 pairs of a specific Nike sneaker each day. Nike, the supplier, takes a week (7 days) to deliver the order. For what quantity should the inventory manager place his/her next order?​

Answer 1

3500 units

Step-by-step explanation:

The quantity at which the Primetime inventory manager places his/her next order is the reorder point.

The reorder point is the minimum quantity of inventory that a business should have in its store.

The reorder point is calculated using the formula below.

(Average daily unit sales x delivery lead time) + safety stock

For Primetime, safety stock is not mentioned

reorder point =500 units x 7 days

=3500 units