Question

Calculate the reorder point of the production store knowing that the average used is 100 units with a standard deviation of 10 units and 95% confidence (≈ 1.65).

Answer 1

The reorder point of the production store is 116.5 units.

Step-by-step explanation:

The reorder point of the production store can be calculated using the formula:

Reorder point = (Average usage) + (Z-Score * Standard deviation)

In this case, the average usage is 100 units and the standard deviation is 10 units. With a 95% confidence level, the Z-Score is approximately 1.65.

Using these values, the reorder point can be calculated as:

1. Reorder point = (100) + (1.65 * 10)
2. Reorder point = 100 + 16.5
3. Reorder point = 116.5 units