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A Company Has Average Demand of 30 Units Per Day

Question 42

Multiple Choice

A company has average demand of 30 units per day.Lead time from the supplier averages 7 days.Assume that the combined standard deviation of demand during lead time has been calculated and is equal to 20 units.One unit costs $10 and the inventory carrying cost is 25 percent. A company has average demand of 30 units per day.Lead time from the supplier averages 7 days.Assume that the combined standard deviation of demand during lead time has been calculated and is equal to 20 units.One unit costs $10 and the inventory carrying cost is 25 percent. What is the reorder point for the company if it decides on a 99 percent service level? A) 243 units B) 257 units C) 77 units D) 210 units What is the reorder point for the company if it decides on a 99 percent service level?


A) 243 units
B) 257 units
C) 77 units
D) 210 units

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