Which of the following tells management "when" to order?
A)safety stock level
B)order point
C)the economic order quantity
D)the Pareto inventory analysis

Question

Quizplus · Accepted Answer

The order point specifies when management should place an order for inventory. It is the level of inventory at which an order needs to be placed to avoid stockouts. The safety stock level is the amount of inventory kept on hand to prevent stockouts due to unexpected demand, while the economic order quantity determines how much to order at one time to minimize holding and ordering costs. The Pareto inventory analysis identifies which items to reorder based on their contribution to total sales value. Therefore, the order point is the best choice for determining when to order.

Which of the Following Tells Management "When" to Order