The min-max method is based on the premise that the quantities of most stock items are subject to definable limits. A maximum quantity for each item is established. A minimum level provides the margin of safety necessary to prevent stock outs during a reorder cycle. The minimum level sets the order point, and the order quantity usually brings inventory up tho the maximum level. min-max can be based on physical observation, or it can be keyed in to the accounting system. Physical observation that an order point has been reached is illustrated by the two-bin method. Under this method, each stock item is stored in two bins, piles, or bundles. The first bin contains enough stock to satisfy usage that occurs between receipt of an order and the placing of the next order; the second bin contains the normal amount used from order data to delivery data plus the safety stock. When the first bin is empty and the second bin is tapped, a purchase requisition for a new supply is prepared. The min-max method can also be implemented through the accounting system. When materials ledger record shows that the balance of stock on hand has dropped to the order point, it sets off the purchase sequence. This works especially well in an electronic data processing system.