1. How much inventory should be ordered and when?
2. What is the optimal order quantity and reorder point?
The first question addresses the decision of how much inventory to order and when, taking into consideration factors such as lead time, holding costs, and shortage costs. The second question focuses on determining the optimal order quantity and reorder point, which is the level of inventory at which a new order should be placed, in order to minimize total inventory costs (such as holding and ordering costs).
These questions are crucial for effective inventory management as they help to minimize costs while ensuring that customer demand is met in a timely manner. The answers to these questions can be used to develop and implement an inventory control policy that balances the trade-off between holding costs and shortage costs, and helps to minimize overall inventory costs.