What is the appropriate reorder point for the marshmallow peeps?

The reorder point is a critical inventory management concept that indicates the level of inventory at which a new order should be placed to restock before running out of product. To determine the appropriate reorder point for marshmallow peeps, several factors are considered, including the lead time for replenishment and the average consumption rate.

Choosing 93 as the reorder point suggests that based on these factors, it is calculated that when inventory levels drop to 93 units, it will be necessary to place an order to ensure that stock does not run out before the new supply arrives. This means that the demand during the lead time can be met without risking a stockout situation.

Setting the reorder point at 93 considers potential fluctuations in demand as well as the time it takes for new inventory to arrive, which ensures continuous availability of the product. This balance helps maintain optimal stock levels, avoiding both excess inventory costs and the cost of lost sales due to stockouts.

In contrast, other options may not account as effectively for the consumption rate and lead time, potentially leading to situations where there is either too much inventory on hand or not enough to meet customer demand.