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When to reorder is different from how much to order

An inventory can need a new order while there is still stock on the shelf. The reorder point accounts for what may be used before a delivery arrives; the order quantity answers a separate question about how much to buy. Stock already on order can also matter when deciding whether another order is needed.

5–7 min

Questions you could explore

  • Why could looking only at the shelf cause an unnecessary duplicate order?
  • How do stock already ordered and the supplier's lead time affect a reorder decision?

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