Question

The following information applies to Krynton​ Company, which supplies microscopes to laboratories throughout the country. Krynton purchases the microscopes from a manufacturer which has a reputation for very high quality in its manufacturing operation. Annual demand​ (weekly demand​ = 1/52 of annual​ demand) 55,000 units Orders per year 70 Lead time in days 25 days Cost of placing an order long dash $160 What is the reorder​ point? (Assume a 365 day​ year.) A. 3,767 units B. 3,640 units C. 786 units D. 2,200 units

Answer 1

Answer:

A. 3,767 units

Explanation:

Given that:

Annual demand​ (weekly demand​ = 1/52 of annual​ demand)

and  55,000 units Orders per year  occcurs;

Then the reorder point can be calculated as:

Reorder point = $\frac{55000}{52}$

= 1057.69 units/week

For the Daily Demand; we have:

= $\frac{1057.69}7}$

= 151.10 Daily demand

Now, in 25 days ; we will have the reorder point = 151.0 Daily demand × 25 days

= 3777.5 units

which is approximately (≅) nearest to 3767 units