APICS Certified in Logistics, Transportation and Distribution (CLTD) — Question 1

Given the data below, calculate the reorder point (ROP).
Average daily demand = 30 units/day

Lead time = 4 days -

Safety stock = 20 -

Answer options

• A. 30 units
• B. 8 units
• C. 120 units
• D. 140 units

Correct answer: D

Explanation

The reorder point (ROP) is calculated by the formula ROP = (Average daily demand * Lead time) + Safety stock. In this case, ROP = (30 units/day * 4 days) + 20 units, which equals 140 units. The other options do not take into account the safety stock or lead time correctly.