1Z0-520 practice question 25 of 30

Which three statements are true regarding Inventory replenishment methods? (Choose three.)

Full set: 245 questions
Answer options
A: Min-max planning considers order cost.
B: Min-max planning considers carrying cost.
C: Reorder point planning considers order cost. Correct answer
D: Reorder point planning considers replenishment lead time. Correct answer
E: Min-max planning can be performed at the subinventory level. Correct answer
F: When an item is defined, both reorder point planning and min-max planning can be specified to place limits on the calculated reorder point.
Correct Answer:
C. Reorder point planning considers order cost.; D. Reorder point planning considers replenishment lead time.; E. Min-max planning can be performed at the subinventory level.
Explanation

Reorder Point (ROP) planning calculates replenishment requirements using the Economic Order Quantity (EOQ) model, which incorporates order costs, carrying costs, annual demand, and replenishment lead times. Conversely, Min-Max planning relies on fixed user-defined minimum and maximum quantity thresholds rather than cost-based EOQ equations. Min-Max planning can be executed at both the organization level and individual subinventory levels. In the item master setup, Inventory Planning Method is a mutually exclusive attribute, preventing both Min-Max and Reorder Point planning from being defined simultaneously for the same item.

Why Incorrect

A: Min-Max planning uses user-specified minimum and maximum inventory thresholds and does not calculate reorder quantities using order cost. B: Min-Max planning does not incorporate inventory carrying cost into its replenishment calculations. F: An item can only be assigned a single Inventory Planning Method attribute in Oracle Inventory, making concurrent specification impossible.

References

- Oracle Inventory User's Guide, Release 12.2, Chapter 9: Inventory Planning and Replenishment, "Min-Max Planning".

- Oracle Inventory User's Guide, Release 12.2, Chapter 9: Inventory Planning and Replenishment, "Reorder Point Planning".

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