Which of the Following Statements Regarding the Reorder Point Is

question 107

Multiple Choice

Which of the following statements regarding the reorder point is TRUE?

• A)The reorder point is that quantity that triggers an action to restock an item.
• B)There is a reorder point even if lead time and demand during lead time are constant.
• C)The reorder point is larger than d × L if safety stock is present.
• D)A shorter lead time implies a smaller reorder point.
• E)All of the above are true.

---

Definitions:

Trading Security

A financial asset that a company holds primarily for the purpose of selling it in the short term to profit from price changes.

Available-For-Sale Security

A financial asset that is neither classified as held-to-maturity nor held for trading, and the investor intends to sell if needed before its maturity or holding period ends.

Perfectly Matched Hedge

A hedging strategy that entirely eliminates the risk of a particular position by taking an offsetting position in the market.

Interest Rate Swap

A financial derivative contract in which two parties agree to exchange future interest rate payments, typically one fixed-rate and one variable-rate.