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Explain the Following Terms with Proper Example: Re-order Point - Entrepreneurship

Definition

Explain the following term with proper example:

Re-order point

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Solution

It is a level at which a new order must be placed so that the inventory is renewed before the stock reaches zero level.
It is estimated by using the formula Reorder Point = Usage Rate x Lead Time.

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APPEARS IN

CBSE Class 12 Entrepreneurship Textbook
Chapter 5 Business Arithmetic
Very short answer (exceed 15 words) | Q 1.5 | Page 208
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