FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Candy Delight Company manufactures candy. The company buys the sugar used in 15-pound boxes that cost $20 each. The company uses 20,000 boxes of sugar per year, and usage occurs evenly throughout the year.
The average cost to carry a 15-pound box in inventory per year is $4, and the cost to place an order is $1.
If the lead time for an order is normally seven working days, and if 30 boxes of sugar are carried as safety stock, determine the reorder point for the sugar.
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