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Reorder Point worksheet

Grade 12 to college

Solve each problem and show your work. Round answers to 2 decimal places where needed.

1.
Problem 1.
- Average daily usage: 40 units/day
- Lead time: 7 days
- Safety stock: Enter my own
- Safety stock: 58 units
Find: Reorder point
Answer
2.
Problem 2.
- Average daily usage: 32 units/day
- Lead time: 7 days
- Safety stock: Calculate from a service level
- Service level: 80%
- Standard deviation of daily demand: 7 units
Find: Reorder point
Answer
3.
Problem 3.
- Average daily usage: 38 units/day
- Lead time: 8 days
- Safety stock: Enter my own
- Safety stock: 42 units
Find: Reorder point
Answer
4.
Problem 4.
- Average daily usage: 33 units/day
- Lead time: 8 days
- Safety stock: Enter my own
- Safety stock: 50 units
Find: Reorder point
Answer
5.
Problem 5.
- Average daily usage: 55 units/day
- Lead time: 6 days
- Safety stock: Enter my own
- Safety stock: 55 units
Find: Reorder point
Answer
6.
Problem 6.
- Average daily usage: 44 units/day
- Lead time: 7 days
- Safety stock: Enter my own
- Safety stock: 50 units
Find: Reorder point
Answer
7.
Problem 7.
- Average daily usage: 44 units/day
- Lead time: 7 days
- Safety stock: Enter my own
- Safety stock: 48 units
Find: Reorder point
Answer
8.
Problem 8.
- Average daily usage: 26 units/day
- Lead time: 6 days
- Safety stock: Calculate from a service level
- Service level: 90%
- Standard deviation of daily demand: 9 units
Find: Reorder point
Answer
9.
Problem 9.
- Average daily usage: 50 units/day
- Lead time: 6 days
- Safety stock: Calculate from a service level
- Service level: 85%
- Standard deviation of daily demand: 7 units
Find: Reorder point
Answer
10.
Problem 10.
- Average daily usage: 55 units/day
- Lead time: 6 days
- Safety stock: Calculate from a service level
- Service level: 60%
- Standard deviation of daily demand: 6 units
Find: Reorder point
Answer

Answer key: Reorder Point worksheet

1. Reorder point: 338 units
1. Find how much you'll use while you wait for the delivery: average daily usage × lead time in days
  $40 \times 7$ $= 280$
2. Add the cushion to what you'll use while waiting. That's the stock level to reorder at
  $280 + 58$ $= 338$
2. Reorder point: 239.59 units
1. Find how much you'll use while you wait for the delivery: average daily usage × lead time in days
  $32 \times 7$ $= 224$
2. Look up Z, how many standard deviations of cushion a 80% service level needs (from the bell curve)
  $Z = Φ⁻¹ \frac{80}{100} = 0.841621$
3. Find the safety stock: Z × how much daily demand varies (σ) × the square root of the lead time, because swings partly cancel out over several days
  $0.841621 \times 7 \times \sqrt{7}$ $= 15.587043$
4. Add the cushion to what you'll use while waiting. That's the stock level to reorder at
  $224 + 15.587043$ $= 239.587043$
3. Reorder point: 346 units
1. Find how much you'll use while you wait for the delivery: average daily usage × lead time in days
  $38 \times 8$ $= 304$
2. Add the cushion to what you'll use while waiting. That's the stock level to reorder at
  $304 + 42$ $= 346$
4. Reorder point: 314 units
1. Find how much you'll use while you wait for the delivery: average daily usage × lead time in days
  $33 \times 8$ $= 264$
2. Add the cushion to what you'll use while waiting. That's the stock level to reorder at
  $264 + 50$ $= 314$
5. Reorder point: 385 units
1. Find how much you'll use while you wait for the delivery: average daily usage × lead time in days
  $55 \times 6$ $= 330$
2. Add the cushion to what you'll use while waiting. That's the stock level to reorder at
  $330 + 55$ $= 385$
6. Reorder point: 358 units
1. Find how much you'll use while you wait for the delivery: average daily usage × lead time in days
  $44 \times 7$ $= 308$
2. Add the cushion to what you'll use while waiting. That's the stock level to reorder at
  $308 + 50$ $= 358$
7. Reorder point: 356 units
1. Find how much you'll use while you wait for the delivery: average daily usage × lead time in days
  $44 \times 7$ $= 308$
2. Add the cushion to what you'll use while waiting. That's the stock level to reorder at
  $308 + 48$ $= 356$
8. Reorder point: 184.25 units
1. Find how much you'll use while you wait for the delivery: average daily usage × lead time in days
  $26 \times 6$ $= 156$
2. Look up Z, how many standard deviations of cushion a 90% service level needs (from the bell curve)
  $Z = Φ⁻¹ \frac{90}{100} = 1.281552$
3. Find the safety stock: Z × how much daily demand varies (σ) × the square root of the lead time, because swings partly cancel out over several days
  $1.281552 \times 9 \times \sqrt{6}$ $= 28.252327$
4. Add the cushion to what you'll use while waiting. That's the stock level to reorder at
  $156 + 28.252327$ $= 184.252327$
9. Reorder point: 317.77 units
1. Find how much you'll use while you wait for the delivery: average daily usage × lead time in days
  $50 \times 6$ $= 300$
2. Look up Z, how many standard deviations of cushion a 85% service level needs (from the bell curve)
  $Z = Φ⁻¹ \frac{85}{100} = 1.036433$
3. Find the safety stock: Z × how much daily demand varies (σ) × the square root of the lead time, because swings partly cancel out over several days
  $1.036433 \times 7 \times \sqrt{6}$ $= 17.771131$
4. Add the cushion to what you'll use while waiting. That's the stock level to reorder at
  $300 + 17.771131$ $= 317.771131$
10. Reorder point: 333.72 units
1. Find how much you'll use while you wait for the delivery: average daily usage × lead time in days
  $55 \times 6$ $= 330$
2. Look up Z, how many standard deviations of cushion a 60% service level needs (from the bell curve)
  $Z = Φ⁻¹ \frac{60}{100} = 0.253347$
3. Find the safety stock: Z × how much daily demand varies (σ) × the square root of the lead time, because swings partly cancel out over several days
  $0.253347 \times 6 \times \sqrt{6}$ $= 3.723427$
4. Add the cushion to what you'll use while waiting. That's the stock level to reorder at
  $330 + 3.723427$ $= 333.723427$