The reorder quantity is the difference between which two stock levels?

• A. Lead time and reorder level
• B. Maximum stock level and minimum stock level
• C. Minimum stock level and reorder level
• D. Maximum stock level and lead time

Answer: (B)

Reorder quantity is the amount you order each time to replenish stock, and it corresponds to the range you want to hold in inventory. You set a minimum stock level as a safety buffer and a maximum stock level as the upper limit. When stock falls to the minimum, you order enough to raise it back up to the maximum. The size of that order is the difference between the maximum and minimum stock levels. So the reorder quantity equals maximum stock level minus minimum stock level. This ensures you restore stock efficiently without letting it dip too low or push you into overstock.