Calhoun Corporation
Calhoun Corporation's order quantity for Material T is 5,000 lbs.The company maintains a safety stock of T at 500 lbs. ,and its order point is 1,500 lbs.
Refer to Calhoun Corporation.What is the lead time assuming daily usage is 50 lbs.?

Question

Quizplus · Accepted Answer

The lead time is calculated based on the order point, daily usage, and safety stock. The order point is 1,500 lbs., and daily usage is 50 lbs. The lead time is the time until the stock reaches the point where a new order must be placed, not including the safety stock. Therefore, lead time = (Order Point - Safety Stock) / Daily Usage = (1500 - 500) / 50 = 1000 / 50 = 20 days.

Calhoun Corporation Calhoun Corporation's Order Quantity for Material T Is 5,000 Lbs.The