What determines the reorder point in an inventory system?

The reorder point in an inventory system is determined primarily by supplier lead times and demand rates. This entails understanding how long it takes for inventory replenishment to arrive (lead time) and how quickly inventory is sold or used during that period (demand rate). The formula for calculating the reorder point typically involves multiplying the average demand during lead time by the lead time duration.

When demand for a product is high or the lead time is extended, the reorder point increases to ensure that stock is ordered before it runs out, thus preventing stockouts. Therefore, option A accurately reflects the essential factors that influence when to reorder inventory, ensuring continuous product availability.