Ace the CPIM Exam 2025 – Turbocharge Your Supply Chain Smarts!

When the total stock falls below the order point, a replenishment order is triggered. This is a critical component of inventory management and helps to ensure that stock levels are maintained at an optimal level to meet demand without risking stockouts. The order point is a predetermined level of inventory that indicates when it's time to reorder. By setting this threshold, businesses can automate their inventory processes, thereby ensuring that they maintain continuity in supply and can effectively meet customer needs.

Maintaining the right inventory levels is essential for operational efficiency and customer satisfaction. When stock dips below the order point, it signals that inventory is reaching a critically low level, prompting the need for replenishment to avoid interruptions in service or production. This proactive approach helps organizations manage their resources effectively and reduces the risk of lost sales due to stock unavailability.