Question

QUESTION
Calculate Minimum Level. Maximum usage of component: 450 units per
week Minimum usage of component: 150 units per week Normal reorder
period: 5 weeks Minimum reorder period: 4 weeks
2700 units​

Answer 1

Explanation:

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Answer 2

450 Units  is the Minimum Level.

Explanation:

Maximum usage = 450/week

Minimum usage = 150/week

Normal record period = 5 weeks

Minimum record period = 4 weeks

To find: Minimum record level = ?

Minimum stock level = Recorder level - Average usage

                                       × Average recorder time

Average usage = max + min / total

                          = 450 + 150 / 2

                          = 300

Recorder level =  Maximum usage × Maximum recorder time

                          = 450 × 4  

                          =  1800

Average recorder time = 5 + 4 / 2

                                      = 4.5 week

∴ Minimum level = 1800 - 300 × 4.5

                            = 450