Maintaining minimum and maximum stock levels helps prevent which two issues?

• A. Stockouts and excess inventory
• B. Supplier delays
• C. Payment processing errors
• D. Damaged packaging

Answer: (A)

Maintaining minimum and maximum stock levels is a way to control inventory so you don’t run out of items and don’t keep more on hand than you can reasonably use or store. The minimum level acts as a trigger point: when inventory falls to that point, you reorder to prevent a stockout and ensure demand can be met without interruption. The maximum level sets a ceiling: it prevents ordering so much that you accumulate excess stock, tying up money and taking up space.

Together, these limits keep inventory available for customers while avoiding the costs and risks of overstock. That’s why this approach directly prevents both stockouts and excess inventory. Other issues like supplier delays, payment processing errors, or damaged packaging aren’t addressed by min/max levels in the same direct way.