Cranium, Inc., purchases term papers from an overseas supplier under a continuous review system. The average demand for
Posted: Fri Jul 01, 2022 8:59 am
Cranium, Inc., purchases term papers from an overseas supplierunder a continuous review system. The average demand for a popularmode is 280 units a day with a variance of 30 units a day. Itcosts $60 to process each order and there is a five-daylead-time. The holding cost for a paper is $0.25 per year and thecompany policy is to maintain a 95% service level. Craniumoperates 200 days per year. What is the Reorder Point for theitem?