Question

Assuming no safety stock, what is the re-order point (r) given an average daily demand of 50 units, a lead time of 10 days and 625 units on hand

Answer 1

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Reorder point = Average daily demand x lead-time in days

100 x 5 = 500 units

However you should also consider the following factors before ordering:

 

Is there a minimum order quantity for the needed units?Is it a seasonal product?Is your Purchasing budget enough for the needed units?

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