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Greg’s Glass Company is a part time business that sells both glasses and coffee mugs. Greg’s Glass Company has the following average daily sales data for in the month of January.
Glasses – 100 glasses sold,
Coffee mugs - 60 glasses sold
It takes three days to replenish Greg’s inventory after closing each week.
Greg holds safety stock of glasses equivalent to 2 days of daily average usage in the event of an emergency.
What is Greg’s reorder point for both Glasses and Coffee Mugs?
Glasses:


Coffee Mugs:

Respuesta :

Answer: Reorder point for Glasses = 306 units

Reorder point for Coffee mugs=  120 units

Explanation:

Calculation for Glasses

The reorder point= (Average daily consumption x lead time)+ safety stock

=(100 x 3) + (100/30 x 2)

=300+6.6

=307 units

Reorder point for Glasses = 307 units

Calculation for coffee mugs

The reorder point= (Average daily consumption x lead time)+ safety stock

=60 x 2 +0

=120 units

Reorder point for Coffee mugs=  120 units

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