Wilson's Deli can predict with virtual certainty the demand for its products. Wilson's sells 30 hams per week. Purchase-order lead time is 3 weeks and the economic-order quantity is 75 hams. What is the reorder point?
A)30 hams
B)75 hams
C)90 hams
D)100 hams

Question

Quizplus · Accepted Answer

Reorder Point = (Average daily demand x Lead time in days) + Safety Stock
Since the demand is certain at 30 hams per week, the average daily demand is 30/7 = 4.29 hams per day. 
Lead time is given at 3 weeks, which is 21 days. 
Safety stock is assumed to be 0 since demand is always certain. 
Therefore, Reorder Point = (4.29 x 21) + 0 = 90 hams.

Wilson's Deli Can Predict with Virtual Certainty the Demand for Its