The set order points system determines reorder quantities based on what?

The set order points system determines reorder quantities based on what?

• A. Based on minimum and maximum ordering points
• B. Requires visual inspection of stock to determine reorder quantity
• C. Uses automatic reordering by computer only
• D. Depends on supplier delivery schedules

Answer: (A)

The set order points system uses fixed minimum and maximum stock levels to decide how much to reorder. When inventory falls to the minimum (the reorder point), you place an order for enough units to bring stock back up to the maximum. This keeps inventory within a safe range and covers demand during lead time. Visual checks aren’t part of the defined method, and while computers can handle the process, the quantity isn’t determined by automation alone. Supplier delivery schedules influence timing, but the actual reorder quantity comes from the gap between the current level and the maximum target.

The set order points system uses fixed minimum and maximum stock levels to decide how much to reorder. When inventory falls to the minimum (the reorder point), you place an order for enough units to bring stock back up to the maximum. This keeps inventory within a safe range and covers demand during lead time. Visual checks aren’t part of the defined method, and while computers can handle the process, the quantity isn’t determined by automation alone. Supplier delivery schedules influence timing, but the actual reorder quantity comes from the gap between the current level and the maximum target.