Compute the Reorder Point When Daily Demand Is 25 Units,orders

question 54

Multiple Choice

Compute the reorder point when daily demand is 25 units,orders are placed every 15 days,the lead time is 10 days,the desired service level is 98% (which corresponds to 2.06 standard deviations from the mean) ,50 units are on hand and the standard deviation of daily demand during the uncertainty period is 10 units.

• A)525 units
• B)678 units
• C)362 units
• D)475 units

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Definitions:

CPI

The Consumer Price Index (CPI) measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

Period

A length or portion of time.

Buying Power

Buying power refers to the value of currency to purchase goods and services, influenced by factors like inflation and the strength of the currency.

CPI

The Consumer Price Index represents a measurement that calculates the aggregate weighted cost of a selection of consumer goods and services, including items like food, medical services, and transportation.