The reorder point model requires that the small business owner know:

Question

Quizplus · Accepted Answer

The reorder point model requires the small business owner to know the usage rate, the minimum level of stock, the lead time, and the EOQ (economic order quantity). These factors are essential in determining the appropriate reorder point for a business, where the inventory level triggers a new order to be placed with the supplier. Knowing who the supplier is, statistical process controls, TQM, demand pattern for the product, reliability, proximity of the supplier, who has title, or holding costs are also important but not directly related to the reorder point model.

The Reorder Point Model Requires That the Small Business Owner