Answer the following questions using the information below:
Owen-King Company sells optical equipment. Lens Company manufactures special glass lenses. Owen-King Company orders 5,200 lenses per year, 100 per week, at $20 per lens. Lens Company covers all shipping costs. Owen-King Company earns 30% on its cash investments. The purchase-order lead time is 2.5 weeks. Owen-King Company sells 125 lenses per week. The following data are available:
-What is the reorder point?
Definitions:
Linearly Related
A relationship between two variables in which the change in one variable is directly proportional to the change in another variable.
Scatter Diagram
A graphical representation of data points plotted on a horizontal and vertical axis to show the relationship between two variables.
Negative Linear Relationship
A relationship between two variables where an increase in one variable leads to a decrease in the other, represented by a downward sloping line on a graph.
Dependent Variable
In statistical modeling and experiments, it is the variable assumed to depend on one or more independent variables.
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