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The annual demand of product Z is 3400 units. The shop that sells product Z is open for business 40 weeks per year and 4 days per week. The lead time for product Z is 4 days. Assuming constant demand, calculate the reorder point. Hint: first calculate the total number of days the shop is open for business per year before calculating the reorder point. [Select the appropriate range in which your answer falls.]

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Tundexi

Answer:

85 units

Explanation:

Annual demand = 3,400 units

Using 40 weeks per year & 4 days per week, the no of days per year = 160 days (40*4)

Average daily demand (d) = Annual demand / Number of days per year

Average daily demand (d) = 3400/160

Average daily demand (d) = 21.25 units

Lead time (L) = 4 days

Reorder point = Average daily demand (d) * Lead time (L)

Reorder point = 21.25 * 4

Reorder point = 85 units

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