When Demand and Lead Time Are Constant, the Reorder Point

question 27

True/False

When demand and lead time are constant, the reorder point (ROP) is less than the demand during lead time.

---

Definitions:

Total Assets

The sum of all current and fixed assets owned by a person or company, reflecting the total resources at their disposal.

Sustainable Growth

The rate at which a company can grow its sales, profits, and dividends without having to increase equity or debt financing.

Dividend Payout Ratio

A financial metric that indicates the percentage of a company's earnings paid out to shareholders in the form of dividends.

Current Assets

Assets of a company that are expected to be sold, consumed, or converted into cash within one year or within the normal operating cycle of the business.