The best definition of a reorder point is
A)the optimal interval between orders with order quantity fixed.
B)the stock-on-hand level at which successive new orders must be placed.
C)the optimal order size when the interval between orders is fixed.
D)the trigger for expediting an order for more stock.

Question

Quizplus · Accepted Answer

A reorder point is the stock-on-hand level at which successive new orders must be placed to avoid stockouts. It is a predetermined level of inventory that acts as a signal to the company's purchasing department to reorder stock. Once inventory falls below the reorder point, the purchasing department should take immediate action to place a new order.

The Best Definition of a Reorder Point Is