Figure 20 -2 Seal Company has the following information available concerning one of its inventory items:

- Refer to Figure 20-2.The reorder point for the inventory item is
A) 250 units.
B) 600 units.
C) 350 units.
D) 1,500 units.

Question

Figure 20 -2 Seal Company has the following information available concerning one of its inventory items:

- Refer to Figure 20-2.The reorder point for the inventory item is
A) 250 units. 
B) 600 units. 
C) 350 units. 
D) 1,500 units.

Quizplus · Accepted Answer

The formula for the reorder point is (average daily usage x lead time in days) + safety stock. Using the data provided, we can calculate the reorder point as (400 x 5) + 750 = 2,350. Therefore, the closest option to this value is C, which is 350 units.

Figure 20 -2 Seal Company Has the Following Information Available