Company ABC stocks product Y in its inventory. Annual demand is approximately 800 units, with a unit cost of $30. The supplier has a consistent lead time of 4 days. Holding costs are $7.50 per unit of average inventory, and ordering costs are $4 per order. Calculate the reorder point (R) assuming no safety stock. (Assume 365 days per year)

Company ABC stocks product Y in its inventory. Annual demand is approximately 800 units, with a unit cost of $30. The supplier has a consistent lead time of 4 days. Holding costs are $7.50 per unit of average inventory, and ordering costs are $4 per order. Calculate the reorder point (R) assuming no safety stock. (Assume 365 days per year)

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 11P: Negus Enterprises has an inventory conversion period of 50 days, an average collection period of 35...

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