Which of the following statements is best?
A) order point = DDLT + SS
B) average inventory = Q ÷ 2 + SS
C) safety stock is always needed
D) a and b are true
E) d and c are true

Question

Quizplus · Accepted Answer

Option A is the formula for calculating the order point, which is the inventory level at which a new order should be placed to meet the demand during the lead time.
Option B is the formula for calculating the average inventory level, which includes the reorder quantity and safety stock.
Option C is not true, as safety stock is not always needed and depends on factors such as demand variability, lead time, and desired level of customer service.
Thus, options A and B are both true, making option D the correct choice.

Which of the Following Statements Is Best