Delinz Company can predict with virtual certainty the demand for its products.Delinz's sells 75 hams per week.Purchase-order lead time is 3 weeks and the economic-order quantity is 150 hams.What is the reorder point?
A) 675 hams
B) 225 hams
C) 450 hams
D) 150 hams

Question

Quizplus · Accepted Answer

Reorder point = (Average daily usage x Lead time) + Safety stock
Average daily usage = Demand per week / 7 days = 75/7 = 10.71 hams per day
Lead time = 3 weeks
Safety stock is not provided in the question, assuming it to be 0 for this case.
Reorder point = (10.71 x 3) + 0 = 32.13 hams
Rounding up to the nearest integer, the reorder point is 33 hams.
Therefore, the answer is B) 225 hams, as the economic order quantity is 150 hams and the reorder point is 33 hams, so the quantity to be ordered (including safety stock) is 225 hams.

Delinz Company Can Predict with Virtual Certainty the Demand for Its