Material Cost Question:
How to calculate the following inventory levels?
Answer:
a.) Re-order level = Maximum Lead Time x Minimum Lead Time
b.) Maximum level = Reorder Level + Reorder Quantity – (Minimum Usage x Minimum Lead Time)
c.) Minimum level = Reorder Level – (Normal Usage x Normal Lead Time)
d.) Danger level = Maximum Level x Lead time for Emergency purchases
b.) Maximum level = Reorder Level + Reorder Quantity – (Minimum Usage x Minimum Lead Time)
c.) Minimum level = Reorder Level – (Normal Usage x Normal Lead Time)
d.) Danger level = Maximum Level x Lead time for Emergency purchases
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