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What will the reorder point be for the item

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Reference no: EM131725529

Johnson Corporation has the following information about a product that it carries in stock:

Average demand = 48 units per day

Average lead time = 10 days

Item unit cost = $61 for orders of less than 400 units

Item unit cost = $56 for orders of 400 units or more

Ordering cost = $37

Inventory carrying cost = 20%

The business year is 300 days

Standard deviation of demand = 3.1 units

Standard deviation of lead time = 2 days

Desired service level = 97.5%

1. What will the annual inventory turnover rate be for this item? (Round your answer to 1 decimal place.)

2. What will the reorder point be for the item?

Reference no: EM131725529

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