If the average daily demand rate is 50 units per day and the lead time is 3 days,then the reorder point is ______.
A)50 / 3 (i.e.,about 17 units)
B)50 * 3 (i.e.,150 units)
C)50 ^ 3 (i.e.,125,000 units)
D)50 units

Question

Quizplus · Accepted Answer

The reorder point is the level of inventory at which a new order should be placed to avoid stockouts during the lead time. To calculate the reorder point, we need to multiply the average daily demand by the lead time. 
Reorder point = Average daily demand rate * Lead time
Reorder point = 50 units/day * 3 days
Reorder point = 150 units
Therefore, the answer is A) 50/3 (i.e., about 17 units) since it is the closest approximation to the calculated reorder point.

If the Average Daily Demand Rate Is 50 Units Per