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Annual demand for an item is 18,000 units with the cost per unit at $440. The holding rate is 8% and the order cost is $21.00 per order. The standard deviation of daily demand is 2 units. Assume 263 days in the year and a lead-time of 7 days. If a service level of 98% is desired during the reorder interval, what is the reorder point?

A. ≈478 units

B. ≈490 units

C. ≈501 units

D. ≈532 units

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M91759451

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