What term refers to the minimum and maximum amount of inventory to maintain?

The term that refers to the minimum and maximum amount of inventory to maintain is "Min-max inventory." This concept is a crucial component of inventory management, allowing a business to keep enough stock on hand to meet customer demand without overstocking, which can lead to increased costs and waste. By establishing a minimum inventory level, a business ensures it does not run out of products, while the maximum level prevents excess inventory that ties up capital and storage resources.

Min-max inventory systems help to simplify the reordering process by providing clear thresholds for when new stock should be ordered and how much should be ordered to return to optimal inventory levels. This approach enhances operational efficiency, aligns with demand, and ultimately supports better customer service.