Figure 24-1 Mrs. Brown's Bagel Company Manufactures Specialty Bagels. the Company Buys

question 6

Multiple Choice

Figure 24-1
Mrs. Brown's Bagel Company manufactures specialty bagels. The company buys flour in 50-kg bags that cost £25 each. The company uses 10,000 bags per year, and usage occurs evenly throughout the year.
The average cost to carry a 50-kg bag in inventory per year is £4, and the cost to place an order is £10.
The company works 250 days per year.
Mrs. Brown's Bagel Company manufactures specialty bagels. The company buys flour in 50-kg bags that cost £25 each. The company uses 10,000 bags per year, and usage occurs evenly throughout the year.
The average cost to carry a 50-kg bag in inventory per year is £4, and the cost to place an order is £10.
The company works 250 days per year.
-Refer to Figure 24-1. If Brown's lead time is three working days and the average rate of usage is 40 bags per day, the reorder point would be

• A)140 bags.
• B)120 bags.
• C)100 bags.
• D)80 bags.

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