Calculation of the reorder point requires knowledge of
A) the economic order quantity multiplied by the average usage rate.
B) the time from the issuance of a purchase order until the order is received.
C) the average time from the issuance of a purchase order until the economic order quantity occurs.
D) the minimum inventory usage rate.

Question

Quizplus · Accepted Answer

The reorder point calculation requires knowledge of the lead time, which is the time from the issuance of a purchase order until the order is received. This helps determine when a new order should be placed to replenish inventory before it runs out.

Calculation of the Reorder Point Requires Knowledge of