What is Reorder point and Reorder quantity? and what is its
significance?
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Answer Posted / flonabbika
Reorder Point is the amount of stock at which a
replenishment order is made keeping in mind the demand
during lead time. Reorder quantity is an alternative term
for reorder point.
This level ensures prevention of stock shortages and the
associated costs, usually known as stock out costs. It keeps
company operations going until the next optimal order
quantity is received at company premises.
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