CMA Intermediate · Operations Management and Strategic Management · Economics of Maintenance and Spares Management
A cement plant has a spare part with a daily consumption of 6 units. The lead time is 10 days and a safety stock of 20 units is maintained. What is the reorder level?
The reorder level is 80 units. Demand during the 10-day lead time is 6 units a day times 10, which is 60 units, and the safety stock of 20 units is added so production is protected against delays or higher usage.
- A80 unitsCorrect
- B60 units
- C20 units
- D86 units
Explanation
Reorder level = consumption during lead time + safety stock = 6 x 10 + 20 = 80 units. Ignoring safety stock gives 60, which is wrong. Adding daily usage again to get 86 is unfounded.
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