Question

_____________ represents that quantity of material which is normally ordered when a particular material reaches re-ordering level.

• A. Maximum level
• B. Re-order level
• C. Minimum level
• D. Re-order quantity

Answer 1

The correct option is D Re-order quantity

Reorder quantity is the magnitude or the number of units to be ordered in a new purchase order for the fresh supply of a particular inventory item.

Re- order level is the level of inventory which triggers an action to replenish that particular stock. It is a minimum level of stock which a firm need to maintained. Re order quantity is basically depends on the two major element i.e. lead time and average usage.