Answer the following questions using the information below:
The following information applies to Labs Plus, which supplies microscopes to laboratories throughout the country.Labs Plus purchases the microscopes from a manufacturer which has a reputation for very high quality in its manufacturing operation.
-What is the reorder point at Labs Plus?
A)800 units
B)500 units
C)400 units
D)1,600 units
E)200 units

Question

Answer the following questions using the information below:
The following information applies to Labs Plus, which supplies microscopes to laboratories throughout the country.Labs Plus purchases the microscopes from a manufacturer which has a reputation for very high quality in its manufacturing operation. 
-What is the reorder point at Labs Plus?
A)800 units 
B)500 units 
C)400 units 
D)1,600 units 
E)200 units

Quizplus · Accepted Answer

The reorder point is the inventory level at which a new order should be placed. It is calculated as the sum of the lead time demand and the safety stock. The lead time demand is the number of units that will be demanded during the lead time. The safety stock is the number of units that are held in inventory to protect against unexpected increases in demand or delays in delivery. In this case, the lead time is 4 weeks and the average weekly demand is 200 units. Therefore, the lead time demand is 4 * 200 = 800 units. The safety stock is 200 units. Therefore, the reorder point is 800 + 200 = 1,000 units.

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