company has recorded the last six days of daily demand on a single product they sell.Those values are 37,115,93,112,73,and 110.The time from when an order is placed to when it arrives at the company from its vendor is 3 days.Assuming the basic fixed-order quantity inventory model fits this situation and no safety stock is needed,which of the following is the reorder point (R)?
A)540
B)270
C)115
D)90
E)60

Question

Quizplus · Accepted Answer

The reorder point (R) is calculated as the average daily demand multiplied by the lead time. The average daily demand is (37+115+93+112+73+110)/6 = 90. The lead time is 3 days, so R = 90 * 3 = 270.

Company Has Recorded the Last Six Days of Daily Demand