A company annually consumes 10,000 units of part C. The carrying cost of this part is $2

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Question:

A company annually consumes 10,000 units of part C. The carrying cost of this part is $2 per year and the ordering costs are $100. The company uses an EOQ of 500 units. the company operates 200 days per year ( consuming 10,000units/200 days = average usage of 50 units/day) and the average lead time for ordering Part C is 5 days.

1. What is the reorder point if there is no variability in either usage in either usage or lead time?

a. 250 units

b. 300 units

c. 350 units

d. 550 units