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The following information is available for a firm: Demand = 5,200 units/year Standard deviation of weekly demand = 11 units Ordering costs = $45/order Holding

The following information is available for a firm:

  • Demand = 5,200 units/year
  • Standard deviation of weekly demand = 11 units
  • Ordering costs = $45/order
  • Holding costs = $2/unit/year
  • Cycle-service level = 90%
  • Lead-time = 3 weeks
  • Number of weeks per year = 52 weeks

If a firm uses a continuous review system to control the inventory, what would be the reorder point?

A. Between 600 and 1200 units

B. above 1200 units

C. between 1 and 300 units

D. between 301 and 600 units

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