Calhoun Corporation's order quantity for Material T is 5,000 lbs. The company maintains a safety stock of T at 500 lbs., and its order point is 1,500 lbs. Refer to Calhoun Corporation. What is the lead time assuming daily usage is 50 lbs.?
a. 30 days
b. 100 days
c. 10 days
d. 20 days
D
Order point = (Daily use * Lead time) + Safety Stock
1,500 = (50 * LT) + 500
1,000 = (50 * LT)
20 = LT
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