Which of the following statements is CORRECT regarding a simulation model for inventory management?
A) Only demand varies, while the lead time remains constant.
B) The goal is to minimize waiting time.
C) It looks at a combination of order quantity and reorder point.
D) It does not allow backorders of stockouts.

Question

Quizplus · Accepted Answer

A simulation model for inventory management considers both order quantity and reorder point, as they directly affect inventory levels and stockouts. Demand and lead time may also vary in the simulation, but they are not the only factors considered. The goal of the simulation model may vary based on the specific scenario being modeled, but minimizing waiting time is not necessarily the only goal. Backorders or stockouts may be allowed in the simulation to evaluate the impact on overall inventory levels and customer service.

Which of the Following Statements Is CORRECT Regarding a Simulation