When demand is constant,the Reorder point (ROP)is a function of demand and lead time.

Question

Quizplus · Accepted Answer

Reorder point is the level of inventory at which an order for replenishment is placed. It is calculated based on the demand during the lead time, which is the time taken to receive the order after placing it. When demand is constant, the reorder point is solely determined by the product of the average demand rate and lead time. Therefore, the statement is true.

When Demand Is Constant,the Reorder Point (ROP)is a Function of Demand