Q. 16.3. (Reference: Figure 16.6 When to Reorder (How Stock outs May Occur)

Q. A retailer uses a 10-unit reorder point, based on assuming a 8-day lead time, a 10-day usage rate, and a 0-unit safety stock. For how many days will a stockout occur if the lead time becomes 10 days and the usage rate continues at 10 units per day?

• ?A) 0 days
• ?B) 1 day
• ?C) 2 days
• ?D) 3 days
  

Table 16.9 Handy Hardware Store, 2017 Sales Forecast by Month Month Actual Sales 2016 Monthly Sales Index Monthly Sales Forecast for 2017a January $ 46,800 67 $ 73,423 x 0.67 = $ 49,193 February 40,864 58 73,423 x 0.58 = 42,585 March 48,000 59 73,423 x 0.69 = 50,662 April 65,600 94 73,423 x 0.94 = 69,018 May 112,196 160 73,423 x 1.60 = 117,477 June 103,800 148 73,423 x 1.48 = 108,666 July 104,560 149 73,423 x 1.49 = 109,400 August 62,800 90 73,423 x 0.90 = 66,081 September 46,904 57 73,423 x 0.67 = 49,193 October 46,800 67 73,423 x 0.67 = 49,193 November 66,884 96 73,423 x 0.96 = 70,486 December 94,792 135 73,423 x 1.35 = 99,121 Total sales $ 840,000 Total sales forecast $881,080b Average monthly sales $ 70,000 Average monthly forecast $ 73,423 a Monthly sales forecast = average monthly forecast x (Monthly index/100). In this equation, the monthly index is computed as a fraction of 1.00 rather than 100. b There is a small rounding error