Assuming No Safety Stock, What Is the Reorder Point (R)

question 10

Multiple Choice

Assuming no safety stock, what is the reorder point (R) given an average daily demand of 50 units, a lead time of 10 days, and 625 units on hand?

• A) 550
• B) 500
• C) 715
• D) 450
• E) 475

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Definitions:

Comparative Advantage

A principle that states a country should produce and export goods for which it has a lower opportunity cost compared to other countries.

Allocate Resources

The process of distributing available resources among various projects or business units.

Maximize Output

Involves strategies or actions by a firm to produce as much as possible, often while considering constraints like resources, technology, and market demand.

Comparative Advantage

The capability to produce a particular good or service more efficiently than other producers, allowing for trade benefits.