A production lot size is scheduled when on-hand inventory falls ______.
A)to zero
B)below safety stock
C)below zero
D)below safety stock or below zero

Question

Quizplus · Accepted Answer

A production lot size is scheduled when on-hand inventory falls below safety stock or below zero to ensure that there is enough inventory to meet demand without causing stockouts. Choosing option A (to zero) or option B (below safety stock) alone would not account for situations where on-hand inventory is completely depleted. Option C is incorrect as it is not possible to have negative on-hand inventory.

A Production Lot Size Is Scheduled When On-Hand Inventory Falls