Question

A restaurant uses an average of 100 jars of a special sauce each week. The cost of the jar is $75. Inventory

related costs are as follows: Inventory carrying rate is 20%, and ordering costs are $ 100. An examination of restaurant records suggests that weekly demand is approximately normal and has a standard deviation of 5 jars per week. Lead time is three weeks, and the manager wants a stock-out probability that does not exceed 10 percent (z=1.28). What is the reorder point?

311 jars

300 jars

315 jars

288 jars

308 jars

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