Problem: Oil-R-Us is a local gas station and needs your assistance in determining the optimal ordering policy for one of its most popular motor oil. The motor oil has consistent demand, selling 400 gallons per month. Oil-R-Us pays $50 per gallon oil and has an ordering cost of $350 per order. The annual holding cost per unit of inventory is 20% of the unit cost.
The replenishment lead-time is 5 days. Calculate the reorder point, assuming that Oil-R-Us is open every day of the month (month = 30 days) and the demand for the motor oil is constant. (Round answer to 2 decimal places.)