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A company has recorded the last five days of daily demand on their only product. Those values are 120, 125, 124, 128, and 133. The time from when an order is placed to when it arrives at the company from its vendor is 5 days. Assuming the basic fixed-order quantity inventory model fits this situation and no safety stock is needed, which of the following is the reorder point (R)?

A) 120
B) 126
C) 630
D) 950
E) 1200

Respuesta :

Answer:

The answer is letter C.

Explanation:

The reorder point (R) is 630.

Tundexi

The reorder point of the company equals 630.

What is reorder point?

The reorder point is the point at which a firm's stock needs to be replenished.

  • The formula for reorder point is (demand during lead time + safety stock).

Reorder point = (120 + 125 + 124 + 128 + 133) + 0

Reorder point = 630  + 0

Reorder point = 630

Therefore, the Option C is correct.

Read more about reorder point

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