When inventory levels fall to a certain point, items are automatically
A.
at maximum order point
B.
fixed stock
C.
reordered
D.
eliminated
The Answer Is:
C
This question includes an explanation.
Explanation:
In CLT 4.0, the reorder point is the stock level that triggers a replenishment order to prevent stockouts during the supplier lead time. The calculation considers average demand and lead time (often with a safety stock factor). When on-hand plus on-order inventory reaches this threshold, a replenishment signal is issued—manual, system-generated, or via automated kanban—so items are “automatically reordered.” This practice balances service level with carrying cost by ordering just before the pipeline would run dry, ensuring continuity of operations without excessive inventory.
[References: MSSC CLT 4.0 — Inventory Control: Reorder Point & Safety Stock; Demand, Lead Time, and Replenishment Triggers., ===========]
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