Cost per tire $35 each Holding cost 20 percent of tire cost per year Demand 1000 per year Ordering cost $20 per order Standard deviation of daily demand 3 tires Delivery lead time 4 days Because customers generally do not wait for tires but go elsewhere, you decide on a service probability of 98 percent. Assume the demand occurs 365 days per year. Determine the reorder point?

Answer rating: 100% (QA)

To determine the reorder point we need to consider the lead time demand and the safety stock Lead Ti... View the full answer