Question

explain the calculation of different stock levels with examples

Answer 1

"There are major four stock levels:

• Minimum level: re-ordering level = maximum consumption rate * maximum record period

• Maximum level: Maximum Stock Level = Reordering Level + Reordering Quantity – (Minimum Consumption x Minimum Reordering period)

• Danger Level: Danger Level = Average Consumption x Maximum reorder period for emergency purchases.

• Average stock Level: Average Stock Level = Minimum stock Level + 1/2 of Reorder Quantity.

"