Table $5.3$ The Medfield Import Autoparts Company Imports and Sells Standard Air

Multiple Choice

Table $5.3$
The Medfield Import Autoparts Company imports and sells standard air filters for most Japanese cars, and it operates under the continuous review system. The average demand for this item is 1200 units per month $( 14,400$ per year) , and the standard deviation in monthly demand is 250 units. It costs the company $\$ 225$ to process each order, and the lead time is 2 months. The holding cost for one unit is $\$ 0.50$ per year, and the company policy is to maintain a 95 percent cycle- service level. You will need to refer to a normal table to answer the question(s) .
-Use the information in Table 5.3. What is the reorder point R if the cycle- service level is brought down to 80 percent?

A) less than or equal to 2800 units
B) greater than 2800 units but less than or equal to 2900 units
C) greater than 2900 units but less than or equal to 3000 units
D) greater than 3000