MNO uses 120000 units of a product per year Each day an aver

MNO uses 120,000 units of a product per year. Each day an average of 450 units are used in production. However, some day’s as many as 500 units are used. It takes 5 days from the time of ordering the units to the time of arrival of the order.

Required:

What is the reorder point without safety stock?

What is the amount of safety stock needed to avoid any stocking out?

What is the reorder point with safety stock?

Thank you!!!

Particulars	Formula	Calculation	Amount

Reorder Level	Maximum usages * maximum delivery time	500 Units * 5 Days	2500

Safety Stock	(Maximum usages * maximum delivery time)-(Average usages * Average delivery time)	(500 * 5) - (450*5)	250

Reorder point with safety stock		2500+250	2750

MNO uses 120,000 units of a product per year. Each day an average of 450 units are used in production. However, some day’s as many as 500 units are used. It tak

MNO uses 120000 units of a product per year Each day an aver

Solution

Get Help Now

Submit a Take Down Notice