The annual demand for a product is 1,000 units.The company orders 200 units each time an order is placed.The lead-time is 6 days, and the company has determined that 20 units should be held as a safety stock.There are 250 working days per year.What is the reorder point?
A)20
B)24
C)44
D)120

Question

Quizplus · Accepted Answer

Reorder Point = (Demand per day x Lead time) + Safety Stock
Demand per day = Annual demand / Working days per year
Demand per day = 1000/250 = 4 units per day

Reorder Point = (4 x 6) + 20
Reorder Point = 44 units

Therefore, the best choice is C.

The Annual Demand for a Product Is 1,000 Units