Asked by Florence Pochon on Jun 25, 2024
Verified
Lead time for one of Montegut Manufacturing's fastest moving products is 4 days. Demand during this period averages 100 units per day. What would be an appropriate re-order point?
Re-Order Point
A predetermined inventory level at which new stock should be ordered to replenish supplies before reaching a critically low or stock-out situation.
Demand
The quantity of a good or service that consumers are willing and able to purchase at various prices during a given time period.
- Understand how to ascertain and figure out necessary safety stock levels and reorder points by accounting for demand unpredictability and service level intentions.
Verified Answer
MS
Mattison StephensonJul 01, 2024
Final Answer :
Re-order point = demand during lead time = 100 units/day ∗ 4 days = 400 units.
Learning Objectives
- Understand how to ascertain and figure out necessary safety stock levels and reorder points by accounting for demand unpredictability and service level intentions.