A Company Wants to Determine Its Reorder Point (R)

question 84

Multiple Choice

A company wants to determine its reorder point (R) .Demand is variable and they want to build a safety stock into R.If the average daily demand is 12,the lead time is 5 days,the desired "z" value is 1.96 and the standard deviation of usage during lead time is 3,which of the following is the desired value of R?

• A)About 6
• B)About 16
• C)About 61
• D)About 66
• E)About 79

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Definitions:

Yerkes-Dodson Law

A psychological principle stating that performance increases with physiological or mental arousal, but only up to a point, after which performance begins to decrease.

Arousal

A state of being physiologically alert and responsive to stimuli, often leading to increased physical activity and cognitive awareness.

Hypothalamus

A small region of the brain that plays a crucial role in many important functions, including releasing hormones, regulating body temperature, and maintaining daily physiological cycles.

Ghrelin

A hormone produced in the stomach that stimulates appetite and signals the brain to increase food intake.