Business, 05.05.2021 18:00 Spiderblack212

ABC Company supplies ink cartridges for printers on the aftermarket (i. e they sell replacement cartridges). The demand for the cartridge averages 20,002 units per year and operates 365 days per year. The holding cost of the cartridge is $5 per unit per year while the ordering cost is $100 per order. The company is currently using a periodic (P) inventory system, holding 1000 units in safety stock to cover demand uncertainty and placing orders for every 73 days. The company is investigating the possibility of implementing a continuous review (Q) inventory system with holding 15 units in safety stock to cover demand uncertainty. Use the information to answer the next 4 questions. Suppose the company is using a Q system with a lot size of 200 (not the EOQ). What should the reorder point be? Assume 15 units in safety stock.
A Less than 175 units
B Greater than or equal to 175 units but less than 225 units
C Greater than or equal to 225 units but less than 275 units
D Greater than or equal to 275 units but less than 300 units
E More than 300 units

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