Burley Company has the following information available concerning one of its inventory items:
-The reorder point for the inventory item is
A) 200 units.
B) 970 units.
C) 320 units.
D) 500 units.

Question

Burley Company has the following information available concerning one of its inventory items:  
-The reorder point for the inventory item is
A) 200 units. 
B) 970 units. 
C) 320 units. 
D) 500 units.

Quizplus · Accepted Answer

The reorder point is the inventory level at which a new order should be placed. It is calculated as the sum of the safety stock and the average demand during the lead time. In this case, the safety stock is 200 units and the average demand during the lead time is 770 units. Therefore, the reorder point is 200 + 770 = 970 units.

Burley Company Has the Following Information Available Concerning One of Its