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CIPS L4M7 Exam - Topic 3 Question 25 Discussion

Which of the following is the formula for calculating the re-order level?
D) Average usage in a lead-time + Required level of safety stock
A) Average usage in a lead-time / Required level of safety stock
B) Required level of safety stock x Average usage in a lead-time.
C) Required level of safety stock -- Average usage in a lead-time

CIPS L4M7 Exam - Topic 3 Question 25 Discussion

Actual exam question for CIPS's L4M7 exam
Question #: 25
Topic #: 3
[All L4M7 Questions]

Which of the following is the formula for calculating the re-order level?

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Suggested Answer: D

In management accounting, reorder level (or reorder point) is the inventory level at which a com-pany would place a new order or start a new manufacturing run.

Reorder level depends on a company's work-order lead time and its demand during that time and whether the company maintain a safety stock.

If a company maintains a safety stock, reorder level calculation changes are follows:

Reorder Level = Average Demand Lead Time + Safety Stock


LO 2, AC 2.3

by Layla at Dec 10, 2023, 06:36 AM

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Wilburn
8 months ago
I always learned it as D, but I could be wrong.
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Walker
8 months ago
Wait, is it really that simple? I'm not so sure about D.
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Latrice
8 months ago
No way, it's B! Safety stock times average usage!
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Virgie
8 months ago
I thought it was A, but D makes more sense.
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Sanjuana
8 months ago
It's definitely D, right? Average usage plus safety stock.
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Franchesca
8 months ago
I’m pretty certain it’s about adding the average usage in lead-time to the safety stock, but I could be wrong.
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Alexis
9 months ago
I feel like the formula might involve multiplying safety stock by average usage, but that seems off.
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Mattie
9 months ago
I remember practicing a similar question, and I think it was about adding average usage to safety stock.
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Ming
9 months ago
I think the re-order level is related to average usage, but I'm not sure if it's addition or division.
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Viva
9 months ago
Okay, let me think this through step-by-step. The re-order level needs to account for both the average usage during the lead-time and the required safety stock. So I believe the correct formula is B - Required level of safety stock x Average usage in a lead-time.
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Billye
9 months ago
Hmm, I'm a little unsure about this one. I think it might be D - Average usage in a lead-time + Required level of safety stock, but I'm not 100% confident.
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Jolene
9 months ago
I'm pretty sure the formula is B - Required level of safety stock x Average usage in a lead-time. That makes the most logical sense to me.
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Clemencia
9 months ago
I'm drawing a blank on this one. The different options seem pretty similar, and I'm not sure which one is the actual formula. I'll have to review my notes and try to remember how to calculate the re-order level.
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Whitley
9 months ago
The user data script in options B and D could be a good way to handle the second network interface, but I'll need to make sure I understand how to properly configure that.
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Charlesetta
9 months ago
I'm a bit stuck on this one. The TOGAF standard has a lot of terminology, and I want to make sure I don't confuse the different artifact types. Let me re-read the question and options carefully before answering.
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