Which statement is true about minimal quantities of product for office use?

• A. Minimal quantities are interpreted as 5% or less
• B. Minimal quantities are interpreted as 20% or less
• C. Minimal quantities are interpreted as 15% or less
• D. Minimal quantities are interpreted as 25% or less

Answer: (A)

Minimal quantities on hand are the tiny buffer you keep to bridge the time between placing an order and receiving it. For office-use items, this buffer is kept very small so you don’t tie up cash in stock you don’t immediately need. Setting minimal quantities at 5% or less of typical usage keeps the on-hand amount low while still protecting against a stockout during lead time. Higher percentages like 15%, 20%, or 25% would require holding much more inventory, increasing carrying costs and tying up funds unnecessarily for office products that usually turnover quickly. So, the interpretation of minimal quantities as 5% or less best fits the goal of lean, responsive stock management.