Assuming a thirty-day month,and without allowing for safety stock,at what point should bills be reordered?
A) 0 bills remaining
B) 417 bills remaining
C) 2,500 bills remaining
D) 10,000 bills remaining
E) 12,500 bills remaining

Question

Quizplus · Accepted Answer

Without allowing for safety stock, it is recommended to reorder bills when the current inventory level reaches the reorder point. The formula for reorder point is:

Reorder point = usage rate x lead time

Assuming a constant usage rate and lead time, we can calculate the reorder point based on the number of bills used per day:

Reorder point = 100 bills/day x 25 days (30-5 days for order delivery) = 2,500 bills

Therefore, the best choice for the reorder point is C) 2,500 bills remaining.

Assuming a Thirty-Day Month,and Without Allowing for Safety Stock,at What