The Annual Demand for a Product Has Been Projected at 2,000

question 84

Multiple Choice

The annual demand for a product has been projected at 2,000 units.This demand is assumed to be constant throughout the year.The ordering cost is $20 per order,and the holding cost is 20 percent of the purchase cost.Currently,the purchase cost is $40 per unit.There are 250 working days per year.Whenever an order is placed,it is known that the entire order will arrive on a truck in 6 days.Currently,the company is ordering 500 units each time an order is placed.What should be the reorder point (excluding any safety stock) under the current policy?

• A)48
• B)100
• C)6
• D)24
• E)None of the above

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A collection of words complete by nature, usually having a subject and a verb, used to make a statement, ask a question, express surprise, or give an order.