An inventory decision rule states \"when the inventory level goes down to 14 gea

Question

An inventory decision rule states "when the inventory level goes down to 14 gearboxes, 100 gearboxes will be ordered." Which of the following statements is true? One hundred is the reorder point, and 14 is the order quantity. Fourteen is the reorder point, and 100 is the order quantity. The number 100 is a function of demand during lead time. Fourteen is the safety stock, and 100 is the reorder point. None of the above is true. In order to control the likelihood of a stockout due to the variability of demand (demand is loot constant) during lead time, inventory managers need additional stocks, which is EOQ safety stock back order reorder point JIT The two most basic inventory questions answered by the typical inventory model are timing and cost of orders quantity and cost of orders timing and quantity of orders order quantity and service level ordering cost and carrying cost Which of the followings helps determine "Right Quantity"? reorder point EOQ JIT safety stock none of the above In the example of FedEx operation hub location, which of the following pairs is more relevant to it service quality rather than to its cost?

Explanation / Answer

7. D) 14 is the safety stock and 100 is reorder point

8) D) Reorder point

9)D) order quantity and service level

10)E) None of the above

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