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NEW QUESTION: 1
The following information regarding inventory policy was assembled by the JRJ Corporation. The
company uses a 50-week year in all calculations.
The reorder point is:
A. 1,300 units.
B. 3,300 units.
C. 5,200 units.
D. 2,100 units.
Choice "b" is correct. A 50-week year would mean that 200 units are sold per week (10,000 units per year
over 50 weeks). Therefore, 800 units are sold during the lead-time (4 weeks * 200 units per week).
Required safety stock is 1,300 units, which means that no less than 1,300 units must be on hand at any
time. The reorder point is then 2,100 units (1,300 safety stock plus the 800 units used during lead time).
Choices "a", "c", and "d" are incorrect, per the above Explanation:.
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