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

question 49

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 the above is true.

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Definitions:

Deming's Fourteen Principles

A set of management practices introduced by W. Edwards Deming to promote quality, productivity, and competitive position.

Continuing Inspection

A process of ongoing scrutiny in projects or production to ensure standards are maintained throughout the lifecycle.

Mass Basis

The foundation or support derived from a large segment of the population or sector.

Time Sensitive

Describes tasks, decisions, or processes that require completion within a strict timeframe to avoid negative consequences.