Horizon Manufacturing produces wireless speakers. The speaker components used to assemble the speakers are purchased from an external supplier. Each year, 48,000 components are used at a rate of 150 components per day. Some days as many as 200 components are used. On average it takes 7 days after an order is placed for the inventory to arrive at Horizon Manufacturing. What is the reorder point for the speaker components if Horizon wants to maintain a safety stock of 350 components?

Horizon Manufacturing produces wireless speakers. The speaker components used to assemble the speakers are purchased from an external supplier. Each year, 48,000 components are used at a rate of 150 components per day. Some days as many as 200 components are used. On average it takes 7 days after an order is placed for the inventory to arrive at Horizon Manufacturing. What is the reorder point for the speaker components if Horizon wants to maintain a safety stock of 350 components?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 6E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...

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Vaibh