Question
Your company, Whitby Wheels, has been having difficulty with running out of a part that is essential for production. Your job is to examine the
Your company, Whitby Wheels, has been having difficulty with running out of a part that is essential for production. Your job is to examine the company's use of this part, and develop an inventory strategy. You have determined that the company uses 44,000 units of this part per year. Administrative costs associated with placing and tracking an order are $38 per order, and it costs $17 per year to hold each unit of this part in inventory. Whitby Wheels operates 305 work days each year. The lead time with our supplier for this part is 7 days, and we have a safety stock policy of 2 days. What is the reorder point for this part?
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