An Inventory Decision Rule States, "When the Inventory Level Goes

question 105

Multiple Choice

An inventory decision rule states, "When the inventory level goes down to 14 gearboxes, 100 gearboxes will be ordered." Which of the following statements is TRUE?

• A) One hundred is the reorder point, and 14 is the order quantity.
• B) Fourteen is the reorder point, and 100 is the order quantity.
• C) The number 100 is a function of demand during lead time.
• D) Fourteen is the safety stock, and 100 is the reorder point.
• E) None of these is true.

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Definitions:

Harley-Davidson

An American motorcycle manufacturer known for its heavyweight motorcycles designed for highway cruising.

Modular Design

refers to creating complex products from interchangeable parts or modules, allowing for easier assembly, repair, and customization.

Mass Customization

A manufacturing approach that allows for the production of personalized goods at mass production prices by leveraging flexible processes.

Postponement Strategy

A supply chain strategy that delays the final assembly or customization of a product until the latest possible time to reduce inventory costs and respond to specific customer demands.