Home » If the supply lead time is certain and demand during the lead time is constant, a company would be able to set a reorder level such that it used the last item just as a new order arrived thus reducing holding costs to a minimum. The reorder level to do this is found as:
If the supply lead time is certain and demand during the lead time is constant, a company would be able to set a reorder level such that it used the last item just as a new order arrived thus reducing holding costs to a minimum. The reorder level to do this is found as:
April 27, 2022
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Q. If the supply lead time is certain and demand during the lead time is constant, a company would be able to set a reorder level such that it used the last item just as a new order arrived thus reducing holding costs to a minimum. The reorder level to do this is found as:
A. Maximum demand for the material item per day/week × Maximum supply lead time in days/weeks
B. Demand for the material item per day/week × Lead time in days/weeks
C. Both A&B
D. None
Answer: Demand for the material item per day/week × Lead time in days/weeks
