The General Formula for Calculating the Inventory Reorder Point Is

question 128

Multiple Choice

The general formula for calculating the inventory reorder point is

• A) average inventory usage rate multiplied by lead time.
• B) economic order quantity less average inventory usage rate.
• C) lead time multiplied by economic order quantity.
• D) lead time multiplied by average inventory turnover rate.

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Definitions:

Standard

An established measure or model used for comparison in assessing the quality, quantity, or value of something.

Criterion

A standard or principle by which something is judged or decided.

Economic Efficiency

A situation in which resources are allocated in the most beneficial way from the perspective of society, where no one can be made better off without making someone else worse off.

Benefits

Advantages or financial assistance received from employment, government, or insurance, aimed at improving individuals’ well-being.