When is an order placed for additional products?
A) When the quantity available for sale reaches the stockout level
B) When quantity available for sale declines to the lead time stock level
C) When sales fall below the maximum stocking level
D) When inventory falls to the economic order quantity

Question

Quizplus · Accepted Answer

An order is placed for additional products when the quantity available for sale declines to the lead time stock level. This ensures that there is enough inventory to cover the lead time for ordering and receiving new products, preventing stockouts.

Options A, C, and D are not correct because they do not consider the lead time for ordering and receiving new products, which is crucial in maintaining adequate inventory levels.

When Is an Order Placed for Additional Products