The stock level beyond which the actual stock should not normally fall is called:
AMaximum stock level
BDanger level
CRe-order level
DMinimum stock level
Answer & Solution
Correct answer: D. Minimum stock level
1. CA Inter CMA defines several stock levels: minimum, maximum, re-order, and danger.
2. Minimum stock level is the level below which the stock should not normally fall.
3. Falling below it risks production interruption due to stock-out.
4. Hence the correct answer is minimum stock level.
_Source: ICAI BoS Inter Paper 3, Ch 2 "Material Cost", §2.4 ¶2_
Related questions
Annual usage 5,000 units; ordering cost ₹40; carrying cost 20 percent of price ₹20. OptimaMaximum stock level formula is:EOQ when discount is offered changes when:Abnormal loss in material processing is:Stores ledger records material movements in:VED analysis classifies stores items based on:Carrying cost ₹6/unit, ordering cost ₹120/order, annual demand 18,000 units. EOQ equals:Weighted average price after receipts of 100 units at ₹10 and 200 units at ₹13 is: