Question

Sully Company uses 3,000 yards of canvas each day to make tents. It usually takes ten days from the time Sully orders the material to when it is received. If Sully's desired safety stock is 12,000 yards, what is Sully's order point?

Answer 1

42,000 yards

Step-by-step explanation:

The order point must account for the total usage during the lead-time plus the desired safety stock.

If the lead-time is 10 days, the daily usage is 3,000 yards, and Sully desires a safety stock of 12,000 yards, the order point must be:

`P = (3,000*10)+12,000\\P=42,000\ yards`

Sully's order point is 42,000 yards.