Figure 20 - 1 Moriah's Candle Company manufactures candles. The company buys wax in 45-Kilogram containers that cost $17 each. The company uses 25,000 containers per year, and usage occurs evenly throughout the year. The average cost to carry a 45-Kilogram container in inventory per year is $3, and the cost to place an order is $9. The company works 250 days per year.
Refer to Figure 20-1. The lead time is 4 working days and the average rate of usage is 60 containers per day. What is the reorder point?
A) 240 containers
B) 260 containers
C) 220 containers
D) 200 containers
Correct Answer:
Verified
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