A Company Wants to Determine Its Reorder Point (R)

question 28

Multiple Choice

A company wants to determine its reorder point (R) . Demand is variable and the company wants 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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