The Annual Demand for a Product Has Been Projected at 2,000

Multiple Choice

The annual demand for a product has been projected at 2,000 units.This demand is assumed to be constant throughout the year.The ordering cost is $20 per order, and the holding cost is 20 percent of the purchase cost.The purchase cost is $40 per unit.There are 250 working days per year.Currently, the company is ordering 500 units each time an order is placed.Assuming the company uses a safety stock of 20 units resulting in a reorder point of 60 units, what is the expected lead-time for delivery?

A) 4 days
B) 5 days
C) 6 days
D) 7 days