Refer to Smart Products.If management determines that a four day safety stock is appropriate for this input,what is the new reorder point?

Question

Quizplus · Accepted Answer

To calculate the reorder point, we need to add the safety stock level to the average daily demand multiplied by the lead time. The average daily demand is 246 units (8200 units / 30 days) and the lead time is 20 days.

So, the reorder point would be:

Reorder point = (Average daily demand * Lead time) + Safety stock level 
Reorder point = (246 * 20) + 4 day safety stock 
Reorder point = 4920 + 328 
Reorder point = 4932 units

Therefore, option C is the correct answer.