Assuming no safety stock, what is the reorder point (R) given an average daily demand of 78 units and a lead time of 3 days? A. 421 B. 26 C. 78 D. 234 E. 312

The correct option is D. 234.

Explanation:

The reorder point (R) can be described as an inventory level that activates an an action to buy additional items of that same inventory stock.

The reorder point (R) is therefore the minimum amount of an inventory item that is in stock by a company and the must reorder the item immediately it falls to that amount.

The reorder point (R) can be calculated using the following formula:

R = Average daily demand * Lead time (1)

Where;

R = reorder point = ?

Average daily demand = 78 units

Lead time = 3 days

Substituting the values into equation (1), we have:

R = 78 * 3 = 234

Therefore, the correct option is D. 234.

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