# MANAGEMENT

## BUISENESS MANAGEMENT

### INVENTORY MANAGEMENT

 Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
The point at which a business orders more of a product before inventory gets too low is:
 A Stockout B Buffer stock C Anticipation stock D Reorder point
Explanation:

Detailed explanation-1: -A reorder point (ROP) is a specific level at which your stock needs to be replenished. In other words, it tells you when to place an order so you won’t run out of stock.

Detailed explanation-2: -The reorder point (ROP) is the minimum inventory or stock level for a specific product that triggers the reordering of more inventory when reached. When calculating the reorder points for different SKUs, the lead time it will take to replenish inventory is factored in to ensure inventory levels don’t reach zero.

Detailed explanation-3: -A reorder level is the point at which businesses order new stock from the supplier. In most cases, each SKU will have a specific reorder point, which is met when the number of SKUs in storage falls to a predetermined level. Once the SKU reaches this level, stock should be replenished as soon as possible.

Detailed explanation-4: -It is based on the average time taken by the supplier for replenishment, maximum usage of the item during the replenishment time, and safety stock requirement. It is also known as reorder point. The reorder quantity is the quantity of the order that is to be placed on a new purchase order for the particular item.

Detailed explanation-5: -What is the EOQ Reorder Point? The EOQ reorder point is a contraction of the term economic order quantity reorder point. It is a formula used to derive that number of units of inventory to order that represents the lowest possible total cost to the ordering entity.

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