Homework Answers
| R = d*LT + z*SD*(LT^(1/2)) |
| Where, |
| R= Reorder point |
| d = average daily demand |
| LT = Lead time |
| SD = Standard Deviation |
| z= 1.65 given |
| Safety stock = z*SD*(LT^(1/2)) |
| R = 12000*5 + 1.65*3000*(5^(1/2)) |
| R = 12000*5 + 1.65*3000*(5^(1/2)) |
| R = 60000 + 11068.54 |
| R = 71068 |
| Therefore, 3rd option is the correct answer. |
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