A firm's reorder point for an item takes into consideration its ________,which is the difference between the time an order is placed and the time it is actually received.

Question

Quizplus · Accepted Answer

The lead time is the time it takes for an order to be placed and received. The reorder point must take this into consideration to ensure that there is enough stock to cover the lead time and prevent stockouts. Therefore, the best choice is D) lead time. The other options are important factors to consider in inventory management, but they do not pertain to the timing of orders and stock replenishment.

A Firm's Reorder Point for an Item Takes into Consideration