Answer:
The Answer is Reorder Point System.
In a Reorder Point System, when inventory is depleted to a given level, the system notifies the materials control department or the buyer in some organizations to issue a request to a supplier for inventory replenishment
Explanation:
A Reorder Point System is a process where the inventory is restored as soon as the existing stock hits a specific bottom. This will help in ensuring that there is no interruption in the production and also saves on extra costs.
A reorder point is the level of inventory which triggers an action to restock that particular inventory stock. It is a minimum amount of an item which a firm holds in stock, such that, when stock falls to this amount, the item must be reordered.
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Answer: Reorder point system
Explanation: The reorder point system notifies the materials control department or the buyer to issue a request to a supplier for inventory replenishment. This is usually when inventory is depleted to certain levels (reorder level or reorder point) which is the minimum amount of an item in stock for which a reorder is made on getting to that level. The reorder point system helps to ensure that replacement stocks arrive in time to avoid stock outs. It also helps to avoid inventory holding costs (as a result of inventory pile ups) that sometimes result from placing orders too early.
