Question: 5. Reorder Point Problem SOO Maximum level = 800 units 700 stock Units Held 600 Lead Time 500 400 Reorder Level = 400 units 300

5. Reorder Point Problem SOO Maximum level = 800

5. Reorder Point Problem SOO Maximum level = 800 units 700 stock Units Held 600 Lead Time 500 400 Reorder Level = 400 units 300 200 Minimum = 200 units 100 Buffer Stock 1 2 3 8 9 20 Time sweeks ) 5a. What is the reorder point (ROP), safety stock, and the Order Quantity/EOQ for the example above? (Note: do not need to calculate EOQ)? (5 pts) 5b. Given the example above, management decides to reduce safety (buffer) stock to zero while keeping maximum level constant. What is the impact on 1) ROP, 2) the amount that is ordered, and 3) overall inventory levels? (5 pts)

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