Which operational model calculates the reorder trigger point based on daily usage rate and lead time length?

Explanation

• The Reorder Point (ROP) is the specific inventory level that signals the purchase of new replenishment stock.
• Formula: $text{ROP} = (text{Daily Demand Rate} times text{Lead Time in Days}) + text{Safety Stock}$.
• Placing orders exactly at the ROP prevents inventory stockouts during supplier lead times.