BUISENESS MANAGEMENT
INVENTORY CONTROL
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Less than or equal to 0 units
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Greater than 0 but less than or equal to 500 units
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Greater than 500 but less than or equal to 750 units
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Greater than 750 units
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Detailed explanation-1: -Taxes have nothing to do with the cost management of the firm. So, these costs are not part of the costs that a company will incur costs in ordering their orders. Durlinger, P. P. J., & Paul, I. (2012).
Detailed explanation-2: -The reorder quantity formula is simple: just Average Daily Usage x Average Lead Time.
Detailed explanation-3: -The reorder point (ROP) is the level of inventory that triggers an action to replenish that particular inventory stock. It is a minimum quantity of an item that a company holds in stock so, when stocks drop to this quantity, the item must be reordered.
Detailed explanation-4: -The ROP calculation takes into account an item’s average lead time, its demand rate, and its safety stock level if a company utilizes safety stock. The reorder point formula is ROP = (lead time x demand rate) + safety stock level.