John,the owner of a local supermarket,has created a policy for ordering supplies within his department such that at any point in time when the inventory of an item drops to less than 10 percent,a new order is created for a fixed number of items.John is utilizing ________.
A)just-in-time scheduling
B)low inventory principle
C)inventory control number
D)economic order quantity
E)break-even quantity

Question

Quizplus · Accepted Answer

John is utilizing the economic order quantity (EOQ) model, where a fixed order quantity is placed when inventory drops to a certain level (in this case, less than 10%). This model takes into account the costs of ordering and holding inventory and aims to find the optimal order quantity to minimize these costs. Just-in-time scheduling (A) is a different inventory management approach that aims to reduce inventory levels by only ordering what is needed for immediate production. The low inventory principle (B) is a general rule that suggests keeping inventory levels low to reduce costs and increase efficiency. Inventory control number (C) and break-even quantity (E) are not applicable in this scenario.

John,the Owner of a Local Supermarket,has Created a Policy for Ordering