The reorder level for the item would be 152 units. Hence, option (c) can be regarded as the relevant option for this question.
In economics, the term "demand" is regarded as a consumer's willingness and desire to purchase goods and services at a particular price.In general, demand declines as an item or service's price rises. If the price of a good or service drops, the amount required will rise. Customers and organizations alike are well familiar with the phrase "demand" because it makes sense and organically occurs throughout nearly any day. Customers who are keeping an eye on particular things, for instance, might buy more of them when the price goes down. Consumers typically consume decreased items or occasionally nothing at all whenever anything occurs that increases the price, such as a change in season.
To solve the question :
Re-order level = (Maximum daily usage rate × lead time ) + Safety stock
= (20 × 7) + 12
= 140 + 12
= 152 units
Therefore, the reorder (R) level for the item would be 152 units.
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