Use the information below to answer the following question(s).Office Supply House purchases 4,160 reams of paper per year, ordered in lots of 80 reams per week at $150 per ream.The vendor covers all shipping costs.Office Supply House is not required to inspect the shipment upon entry.Office Supply House earns 20% on its cash investments.The purchase order lead time is two weeks.The following cost data are available:

-The level of inventory which should trigger a new order is called
A)the customer demand level.
B)the supply equal demand level.
C)the stockout level.
D)the reorder point.
E)the inventory level.

Question

Use the information below to answer the following question(s).Office Supply House purchases 4,160 reams of paper per year, ordered in lots of 80 reams per week at $150 per ream.The vendor covers all shipping costs.Office Supply House is not required to inspect the shipment upon entry.Office Supply House earns 20% on its cash investments.The purchase order lead time is two weeks.The following cost data are available:
 
-The level of inventory which should trigger a new order is called
A)the customer demand level. 
B)the supply equal demand level. 
C)the stockout level. 
D)the reorder point. 
E)the inventory level.

Quizplus · Accepted Answer

The reorder point is the level of inventory that triggers a new order to be placed.

Use the Information Below to Answer the Following Question(s)