Answer the Following Question(s)using the Information Below

question 38

Multiple Choice

Answer the following question(s) using the information below:
The following information has been gathered for Product A:

-Which of the following statements is TRUE?

• A)The reorder point is the point at which the amount of inventory on hand equals the amount needed to cover sales during the lead time.
• B)The reorder point is the minimum level of inventory allowed during a particular period.
• C)The safety stock is the amount of stock that must be on hand to cover sales during lead time.
• D)The safety stock is the minimum level of inventory that must remain on hand at all times.
• E)The safety stock is the minimum level of inventory that must remain at the customers.

---

Definitions:

Service Department

A segment within a business that supports other departments by providing internal services or activities.

Fixed Costs

Expenses that do not vary in total despite fluctuations in the amount of work or volume of production.

Actual Services

The genuine and realized services provided by a company, as opposed to planned or expected services.

Operating Department

A unit or division within an organization that is directly involved in performing the primary business activities of the company.