Calculate a practical reorder point for butter using daily demand, lead time, and safety stock.
formula-strip stat-tile-trio worked-calculation The bakery uses butter every day for croissants, cakes, buttercream, and cookies. The supplier lead time is two days, daily use averages 18 pounds, and the owner wants 12 pounds of safety stock because weekend demand swings. Reorder point = average daily demand x supplier lead time + safety stock. Do not confuse reorder point with order quantity. The reorder point says when to place the order; the order quantity says how much to buy. Name average daily demand 18 lb per day Use recent production data, not the largest holiday week or the quietest Monday. Multiply…
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