Question

It takes approximately 8 working days for an orderof number 6 screws to arrive once the order has beenplaced. (Refer to Problem 6-18.) The demand fornumber 6 screws is fairly constant, and on the aver-age, Lila has observed that her brother's hardwarestore sells 500 of these screws each day. Because thedemand is fairly constant, Lila believes that she canavoid stockouts completely if she only orders thenumber 6 screws at the correct time. What is theROP?

Answer 1

Answer:

Step-by-step explanation:

Given that:

The demand for number 6 screws is fairly constant and  brother's hardware store sells 500 of these screws each day.

So;

The demand for number 6 screws =  500 screws /day

It takes approximately 8 working days for an order of number 6 screws to arrive once the order has been placed.

Delivery time-frame  = 8 days

Lila believes that she can avoid stockouts completely if she only orders the number 6 screws at the correct time.

i.e Lila would want to have 8 days (delivery time-frame) × 500 screws /day

= 4000 screws

This implies that these 4000 screws will only last for 6 days.

Thus Lila ROP ( reorder point) will be to reorder for another set of  screw the day she receives the current shipment, this implies that after 8 days she would have sold the present 4000 screws and she will be expecting a new re-stock.