The General Chemical Company Uses 150,000 Gallons of Hydro Chloric

Multiple Choice

The General Chemical Company uses 150,000 gallons of hydro chloric acid per month. The cost of carrying the chemical in inventory is 50 cents per gallon per year, and the cost of ordering the chemical is $150 per order. The firm uses the chemical at a constant rate throughout the year. It takes 18 days to receive an order once it is placed. The reorder point is ________.

A) 7,500 gallons
B) 25,000 gallons
C) 90,000 gallons
D) 105,000 gallons