Figure 20 - 1 Jan's Candle Company Manufactures Candles

Multiple Choice

Figure 20 - 1 Jan's Candle Company manufactures candles.The company buys wax in 100-pound containers that cost $15 each.The company uses 20,000 containers per year, and usage occurs evenly throughout the year.The average cost to carry a 100-pound container in inventory per year is $2, and the cost to place an order is $10.The company works 250 days per year.
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Refer to Figure 20-1.The lead time is four working days and the average rate of usage is 80 containers per day.What is the reorder point?

A) 340 containers
B) 320 containers
C) 300 containers
D) 280 containers