Which of the following statements regarding the reorder point is TRUE?
A) The reorder point is that quantity that triggers an action to restock an item.
B) There is a reorder point even if lead time and demand during lead time are constant.
C) The reorder point is larger than d × L if safety stock is present.
D) A shorter lead time implies a smaller reorder point.
E) All of these are true.

Question

Quizplus · Accepted Answer

All the statements provided are true regarding the reorder point. The reorder point is indeed the quantity that triggers an action to restock an item (A). There is a reorder point even if lead time and demand during lead time are constant because it is necessary to know when to reorder to avoid stockouts (B). The reorder point is larger than d × L (where d is the demand rate and L is the lead time) if safety stock is present to account for variability in demand or lead time (C). A shorter lead time generally implies a smaller reorder point because there is less time during which stockouts can occur, thus less inventory is needed to cover the lead time (D).

Which of the Following Statements Regarding the Reorder Point Is