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What is the expected lead-time for delivery

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Problem - The annual demand for a product has been projected at 2,DDD units. This demand is assumed to be constant throughout the year. The ordering cost is $20 per order, and the holding cost is 20 percent of the purchase cost. The purchase cost is $40 per unit. There are 250 working days per year. Currently, the company is ordering 500 units each time an order is placed. Assuming the company uses a safety stock of 20 units resulting in a reorder point of 50 units, what is the expected lead-time for delivery?

Reference no: EM132722577

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