Answer:
Correct option is (B)
Explanation:
Given:
Average daily demand = 50 units
Lead time = 10 days
Re-order point is the point where new order is placed to replenish existing stock.
Lead time is the time gap between order to replenish stock is placed and delivery of stock.
Re order point = Average daily demand × lead time
= 50 × 10
= 500 units
So, stock should be replenished when stock in hand reaches 500 units.
