Ordering more of a particular item every time an inventory level falls to a predetermined point is called the ___.
A) inventory control number
B) quality control paradox
C) economic order quantity
D) break-even quantity
E) fixed quantity inventory

Question

Quizplus · Accepted Answer

This is known as the economic order quantity (EOQ) method, which seeks to balance the cost of holding inventory with the cost of ordering new inventory. By ordering more at the predetermined point, a company can avoid stockouts and minimize the expenses associated with overstocking or understocking. This method considers factors like demand, lead time, ordering costs, and inventory carrying costs to determine the optimal order quantity.

Ordering More of a Particular Item Every Time an Inventory