If lead time is longer than the review period,the order quantity at any review point is the amount needed for the inventory on hand plus all outstanding orders to reach the replenishment level.

Question

Quizplus · Accepted Answer

This statement is true. When lead time is longer than the review period, it is necessary to order enough inventory to cover not only the current inventory level but also any outstanding orders that have not yet been received. Therefore, the order quantity at any review point should be the amount needed to reach the optimal replenishment level.

If Lead Time Is Longer Than the Review Period,the Order