Answer the following question(s)using the information below:
The Wood Furniture Company produces a specialty wood furniture product, and has the following information available concerning its inventory items:
Annual demand is 10,000 packages per year.The purchase price per package is $16.
-Wilson's Deli can predict with virtual certainty the demand for its products.Wilson's sells 20 hams per week.Purchase order lead time is 2 weeks and the economic order quantity is 50 hams.What is the reorder point?
A)20 hams
B)30 hams
C)40 hams
D)50 hams
E)100 hams

Question

Answer the following question(s)using the information below:
The Wood Furniture Company produces a specialty wood furniture product, and has the following information available concerning its inventory items:
  Annual demand is 10,000 packages per year.The purchase price per package is $16.
-Wilson's Deli can predict with virtual certainty the demand for its products.Wilson's sells 20 hams per week.Purchase order lead time is 2 weeks and the economic order quantity is 50 hams.What is the reorder point?
A)20 hams 
B)30 hams 
C)40 hams 
D)50 hams 
E)100 hams

Quizplus · Accepted Answer

The reorder point is calculated as the demand during the lead time. Since Wilson's Deli sells 20 hams per week and the lead time is 2 weeks, the reorder point is 20 hams/week * 2 weeks = 40 hams.

Answer the Following Question(s)using the Information Below