Candy Delight Company manufactures candy. The company buys the sugar used in 15-pound boxes that cost $20 each. The company uses 20,000 boxes of sugar per year, and usage occurs evenly throughout the year. The average cost to carry a 15-pound box in inventory per year is $4, and the cost to place an order is $1. If the lead time for an order is normally seven working days, and if 30 boxes of sugar are carried as safety stock, determine the reorder point for the sugar.
Candy Delight Company manufactures candy. The company buys the sugar used in 15-pound boxes that cost $20 each. The company uses 20,000 boxes of sugar per year, and usage occurs evenly throughout the year. The average cost to carry a 15-pound box in inventory per year is $4, and the cost to place an order is $1. If the lead time for an order is normally seven working days, and if 30 boxes of sugar are carried as safety stock, determine the reorder point for the sugar.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Candy Delight Company manufactures candy. The company buys the sugar used in 15-pound boxes that cost $20 each. The company uses 20,000 boxes of sugar per year, and usage occurs evenly throughout the year.
The average cost to carry a 15-pound box in inventory per year is $4, and the cost to place an order is $1.
If the lead time for an order is normally seven working days, and if 30 boxes of sugar are carried as safety stock, determine the reorder point for the sugar.
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