newspaper publisher uses roughly 800 feet of baling wire each day to secure bundles of newspapers while they are being distribut
ed to carriers. The paper is published Monday through Saturday. Lead time is six workdays. What is the appropriate reorder point quantity, given that the company desires a service level of 95 percent, of that stock out risk for various levels of safety stock is as follows: 1,500 feet, .10; 1,800 feet, .05; 2,100 feet, .02; and 2,400 feet, .01
Reorder point quantity is the level at which an inventory is expected to be restocked , calculated by finding the sum of demand over the lead time and the safety stock days
Daily usage = 800 feet / day
Lead time = 6 days
Desired service level = 95%
Risk level = 1-0.95 =0.05
safety stock at 0.05 = 1800
Reorder point = expected demand in (LT) + safety stock
