Average re-order period
Maximum usage
Maximum re-order period
Normal usage
Answer is Right!
Answer is Wrong!
The correct answer is: B. Maximum usage
The re-ordering level is the level of inventory that triggers a new order. It is calculated by multiplying the maximum consumption by the maximum usage. The maximum consumption is the highest amount of a product that is used in a given period of time. The maximum usage is the longest period of time that a product can be used without being replenished.
The other options are incorrect because:
- Option A, average re-order period, is not used in the calculation of the class="youtube-subscribe-container"> Subscribe on YouTube