Calculate the reorder point using equation 203 what is the, Operation Management

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Calculate the reorder point using equation 203 what is the

Reorder Point

Sterling Corporation has an EOQ of 5,000 units. The company uses an average of 500 units per day. An order to replenish the part requires a lead time of five days.

Required:

1. Calculate the reorder point, using Equation 20.3.

units

2. What if the average usage per day of the part is 500 units but a daily maximum usage of 575 units is possible? What is the reorder point when this demand uncertainty exists?

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