Which of the following statements regarding the reorder point (ROP) model is true?
A) The model tells us that it is the time to buy.
B) The model does not tells us how much to buy.
C) The model continuously reviews the inventory position and triggers an order as soon as the inventory position falls to the preset reorder point.
D) All of the above are true.

Question

Quizplus · Accepted Answer

The reorder point (ROP) model is designed to indicate the right time to place an order (A), it does not specify the quantity to order, which is determined by other parameters such as the economic order quantity (EOQ) (B), and it indeed triggers an order when inventory levels fall to a predetermined point, ensuring continuous review of inventory levels (C).

Which of the Following Statements Regarding the Reorder Point (ROP)