The fixed order interval model requires a larger amount of safety stock than the reorder point (ROP)model for the same risk of a stock-out.

Question

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The fixed order interval model has a longer time period between orders, which increases the risk of stock-outs. To compensate for this, a larger amount of safety stock is needed to ensure that demand can be met until the next order arrives. In comparison, the reorder point model has more frequent orders and therefore requires less safety stock.

The Fixed Order Interval Model Requires a Larger Amount of Safety