What is the reorder point

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Reference no: EM1383665

Annual demand for an item is 20,000 units and the order cost is $40.00 per order. Holding cost is $10 per unit per year. The purchase cost of each unit is $200. The standard deviation of daily demand is 5 units. Assume 260 days in the year and a stable lead-time of 25 days. If a service level of 97% is desired during the reorder interval, what is the reorder point (select the closest number)?
A. 1165 units
B. 1380 units
C. 1541 units
D. 1970 units

Reference no: EM1383665

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