What is Reorder point and Reorder quantity? and what is its
significance?
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Answer Posted / pawan dua
Recorder Point is a minimum level of the on-hand inventory
stock; when the onhand stock reaches this point, an
automatic requisition is generated. Reorder quantity is the
governed by multiple factors like - safety stock or maximum
quantity; supplier BOD; Lead time, minimum order quantiy
etc.
The significance is to ensure handling of shortages which
enables smooth manufacturing.
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