The correct answer is: C. re-order level is maintained.
The re-order level is the level of inventory at which a new order should be placed. It is calculated by taking into account the lead time, the daily demand, and the safety stock. The lead time is the time it takes to receive an order after it is placed. The daily demand is the number of units that are used each day. The safety stock is the amount of inventory that is kept on hand to protect against unexpected demand or delays in delivery.
By maintaining a re-order level, businesses can ensure that they have enough inventory on hand to meet demand and avoid production stoppages.
Option A is incorrect because maintaining a maximum stock level can lead to unnecessary costs. Option B is incorrect because maintaining a minimum stock level can lead to production stoppages. Option D is incorrect because maintaining an average stock level does not guarantee that there will be enough inventory on hand to meet demand.