Question

From the following information calculate reorder level: Maximum Reorder period - 5 weeks, Minimum Reorder period - 3 weeks, Average Usage per week - 140 units, Minimum usage units per week 120 units, Maximum time lag for immediate purchase is half week, Reorder quantity: 2400 units Crom​

Answer 1

Answer:

(i) Maximum Level of Stock = (Reorder Level + Reorder Quantity) – (Minimum rate of consumption x Minimum reorder period)

Maximum Level may be alternatively fixed as Safety Stock + Reorder Quantity or EOQ.