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Reorder Point Techniques
Systems based on reorder points assume that demand is uniform and predictable and that there is no true identifiable time of need. Hence, stock must always be available. In practice, demand is discontinuous and follows a lumpy pattern. Stock is seldom depleted item-by-item, it is more common to deplete or order by lots or batches. This ordering in lots tends to magnify the requirements or lot sizes from the finished item to the component to the raw material levels.
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What is average revenue and average revenue curve Average Revenue: The average revenue is the total revenue separated by the level of output. It is therefore the price.
Natural Factors: Seasonal variations may affect the demand for a commodity at certain times of the year. For example, during the raining season, demand for commodities such as j
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