The reorder point is ____.
A) the lead time multiplied by the daily usage plus safety stock
B) the EOQ plus safety stock
C) the lead time multiplied by the annual usage
D) a product of daily usage and the lead time

Question

Quizplus · Accepted Answer

The reorder point formula is the lead time multiplied by the daily usage plus safety stock. This calculation ensures that new stock is ordered just in time before the current stock runs out, taking into consideration both the normal consumption rate and a buffer (safety stock) for unexpected demand or supply delays.

The Reorder Point Is ____