Without allowing for safety stock,what reorder point should be used to reorder resin?
A) 0 kilograms remaining
B) 50 kilograms remaining
C) 200 kilograms remaining
D) 400 kilograms remaining
E) 500 kilograms remaining

Question

Quizplus · Accepted Answer

The reorder point without allowing for safety stock should be equal to the lead time demand, which is the average amount of resin used during the lead time (the time it takes to receive a new shipment of resin). Based on the information given, the average daily demand for resin is 20 kilograms, and the lead time is 10 days. Therefore, the lead time demand is 20 * 10 = 200 kilograms. This means that the reorder point should be when there are 200 kilograms remaining in order to ensure that there is enough resin to cover the lead time demand.

Without Allowing for Safety Stock,what Reorder Point Should Be Used