Using a fixed quantity system (FQS), as the reorder point increases
A)safety stock increases
B)safety stock decreases
C)the number of orders increases
D)the number of orders decreases

Question

Quizplus · Accepted Answer

In a fixed quantity system, the safety stock is usually set at a certain level to ensure continuity of supply. As the reorder point increases (i.e., the point at which an order is triggered), it means that the inventory level is decreasing at a slower pace, and therefore the safety stock needs to be higher to cover the longer lead time. Therefore, as the reorder point increases, the safety stock will also increase.

Using a Fixed Quantity System (FQS), as the Reorder Point