Question

For inventory systems with constant demand and a fixed lead time,

a.the reorder point = lead-time demand.b.the reorder point > lead-time demand.c.the reorder point < lead-time demand.d.the reorder point is unrelated to lead-time demand.

Answer 1

a.the reorder point = lead-time demand

Step-by-step explanation:

The reorder point is when there needs to be a replenishment of depleted stock of inventory.

Lead time is the time between when an order is placed and when delivery of goods and services is made.

So when there is constant demand and fixed lead time, there is no need to keep excess inventory as demand has been anticipated and inventory for the demand is available.

Also the lead time demand from order to delivery is also fixed because demand has been provided for already.

Thus reorder point= lead time demand