Answer:
Option (A) is correct.
Explanation:
Given that,
Standard deviation of weekly demand, SD = 7
Lead time from the plastic supplier = 2 weeks
Z = 1.645 at 95%
[tex]Reorder\ point= (Weekly\ demand\times Lead time)+ [Z\times SD\times (Lead time)^{0.5}][/tex]
[tex]Reorder\ point= (100\times 2)+ [1.645\times 7\times (2)^{0.5}][/tex]
= 216.28 or 216 pounds
Therefore, the reorder point for plastic with safety stock is more than 175 pounds but less than or equal to 225 pounds.