Practicing Success
Practicing Success
CUET Preparation Today
Calculate the Reorder point for Mr. Sonu from the following information. If takes 7 days for Mr. Sonu to receive an order placed, and his Average daily usage rate is 200 units, he keeps 2 days of stock as safety stock. |
1,000/- 1,400/- 1,800/- 1,200/- |
1,800/- |
Recorder point: The reorder point ("ROP") is the level of inventory when an order should be made with suppliers to bring the inventory up by the Economic order quantity ("EOQ"). Formula for Calculating Reorder Point = (Average Daily Usage Rate × Lead Time ) + Safety Stock = (200 × 7) + (200 × 2) = 1400 + 400 = 1800 Hence the Reorder Point for Mr. Sonu is 1800 Units. So the The answer is 1,800/-. |
