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ABC Company annually buys 600,000 units of Part B. The EOQ is 12,000 units. The ABC Companys average usage equals 2,000 units/day (600,000 units/300 working

ABC Company annually buys 600,000 units of Part B. The EOQ is 12,000 units. The ABC Companys average usage equals 2,000 units/day (600,000 units/300 working days) and the average lead-time for ordering Part A is 6 days.

48. What is the reorder point with no variability in either usage or lead-time?

a.

11,000 units

b.

12,000 units

c.

13,000 units

d.

14,000 units

49. What is the level of safety stock if usage could be as high as 2,200 units/day?

a.

1,200 units

b.

1,000 units

c.

800 units

d.

600 units

50. What is the level of safety stock if lead-time could be as high as 9 days?

a.

8,000 units

b.

7,000 units

c.

6,000 units

d.

5,000 units

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