Inventory Control (part 4) – Reorder Level – ACCA Management Accounting (MA)
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Hi sir! would the average inventory not change because of these re-order levels? While explaining the economic batch quantity, you said that the average inventory will not be half of the order quantity because of the delay in goods arriving. so I think the average inventory will not be half the order quantity here also because we will have units left in inventory when the order arrives(for example the case given in example 7 where it says that the reorder level should be such that we never run out of inventory) so maybe the average inventory is always a bit higher than EOQ/2?
Assuming you do mean the re-order level (as opposed to the re-order quantity) then the average inventory will be EOQ/2 + reorder level.
Dear sir,I want to know what does “reorder level minus min demand”(480-210)stand for?
It doesn’t stand for anything š
OK,I know,thank you very much,dear sir.
Thankyou very much for an amazing explanation both in the video and the Notes! Cleared my doubts.
Thank you for your comment š
Thank you so much!
Iām planning to sit on the exam on March and Iām studying from your website and so far I do understand everything from your videos. Iām feeling so confident. Thank you so much!
Thank you for your comment š
Sir, you make our job easy! Thank you
Thank you for your comment š
thanks so much Mr.Moffat
You are welcome š
I never got a teacher like you so far. I have no doubts when i take your lecture. You made them very Indipendent , if one watches carefully they will not have doubts
Very Easy , Very Helpful
there is no formula or need to calculate min. inve. level, safety inv., free inv. etc?
i dont understand the ex 8. the max. inv. level formula is reorder level + reorder quantity – (mix. inventory * min. lead time)
will you please explain the example 8.
thanks in advance
I am not sure what you want explaining, because I explain in the video (and the answer is also printed in the lecture notes).
sir, i mean that to calculate max. inve. level there is formula studied in ma2, formula is reorder level + reorder quantity ā (mix. inventory * min. lead time).
but you didn’t use the formula, why??
he did not use the formula but he used different method. I cleared my concepts from here but gonna use that formula in my exam.
I really love the lectures so far.
Thanks for the help.
Thank you for your comment š
No worries, just turned over the page. Sorry.