A company has average demand of 30 units per day. Lead time from the supplier averages 7 days. Assume that the combined standard deviation of demand during lead time has been calculated and is equal to 20 units. One unit costs $10 and the inventory carrying cost is 25 percent. 
What is the reorder point for the company if it decides on a 99 percent service level?
Definitions:
Net Present Value
The difference between the present value of cash inflows and the present value of cash outflows over a period, used in capital budgeting to assess the profitability of an investment.
Simple Rate
A basic form of interest calculation representing a percentage of the principal amount over a certain period of time.
Payback Period
The payback period is the duration of time it takes to recover the cost of an investment. This metric is commonly used to assess the feasibility or profitability of a project.
Straight-Line Method
A method of calculating depreciation or amortization that allocates evenly the cost of an asset over its useful life.
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