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Calculate re order level , minimum level , maximum level , and average stock level from the following information Normal usage - 600 units per week Maximum usage - 900 units per week Minimum usage - 300 units per week Re order period - 8 to 12 weeks Re order quantity - 48/0 units?
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Calculate re order level , minimum level , maximum level , and average...
Calculation of Inventory Levels


Normal Usage:


  • 600 units per week



Maximum Usage:


  • 900 units per week



Minimum Usage:


  • 300 units per week



Reorder Period:


  • 8 to 12 weeks



Reorder Quantity:


  • 48/0 units



Calculation of Inventory Levels:


Maximum Level:


  • Maximum usage x Reorder period = 900 x 12 = 10,800 units



Minimum Level:


  • Minimum usage x Reorder period = 300 x 8 = 2,400 units



Reorder Level:


  • Normal usage x Reorder period = 600 x 8 = 4,800 units



Average Stock Level:


  • (Maximum level + Minimum level) / 2 = (10,800 + 2,400) / 2 = 6,600 units



Explanation:

The maximum level is the maximum amount of inventory that can be held during the reorder period. The minimum level is the minimum amount of inventory that should be available during the reorder period. The reorder level is the point at which the inventory should be reordered to ensure that there is enough inventory to meet demand during the reorder period. The average stock level is the average amount of inventory that is held during the reorder period.
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Calculate re order level , minimum level , maximum level , and average stock level from the following information Normal usage - 600 units per week Maximum usage - 900 units per week Minimum usage - 300 units per week Re order period - 8 to 12 weeks Re order quantity - 48/0 units?
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