Question

Annual demand of the input is 50,000 and the number of order during the year 4, what is reorder level

13000 units
12500 units
13500 units
10000 units​

Answer 1

Answer:

The correct answer is Option B i.e. 12,500 units.

Explanation:

i) Reorder level or reorder point is the number of units at which company issues a new order of inventory.

ii) Reorder level can vary according to lead time, safety stock, demand of the inventory, etc.

iii) Reorder level = Annual demand/ number of orders in one year

Hence,

Reorder level = 50000/4= 12500

iv) Hence, correct answer is Option B i.e. 12,500 units.

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Answer 2

Answer:

Reorder level is 12500 units

Explanation:

TO FIND:  Reorder level

GIVEN:

    Annual demand of the input is 50,000

Number of orders during the year is 4

Reorder level is a new order of inventory  of the number of units at which company issues.

Reorder level is a  level at a new manfacturing run at which placing new order level.

The reorder level will be calculated in both days and weeks .

$Reorder level = \frac{Annual demand}{Duration of time}$

          $Reorder level=\frac{50000}{4}$

             $Reorder level=12500 units$

The reorder level is 1200 units

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