Question: Inventory models Below are the data for water-testing kits stocked by a field unit of Environmental Protection Agency. Optimal order (Qn) = 6 orders per

Inventory models

  1. Below are the data for water-testing kits stocked by a field unit of Environmental Protection Agency. Optimal order (Qn) = 6 orders per year.

Average daily use : 6 kits

Average reorder period : 20 kits per day

Cost to store one kit per year : P8

Estimated out of stock cost per kit : P30

Usage during reorder period

40

Probability of usage

10

60

15

80

20

100

35

120

15

140

3

160

2

What is the reorder point?

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