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? a. 550b. 500c. 715d. 450e. 475

Correct option is (B)

Explanation:

Given:

Average daily demand = 50 units

Lead time = 10 days

Re-order point is the point where new order is placed to replenish existing stock.

Lead time is the time gap between order to replenish stock is placed and delivery of stock.

Re order point = Average daily demand × lead time

                         = 50 × 10

                         = 500 units

So, stock should be replenished when stock in hand reaches 500 units.

u = 30

continuing your method

= +

subtract from both sides

= - thus

= -

= ⇒ u = 30

answer; sensory adaptation;