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Minimum usage per day =200
Average usage per day =100
Maximum usage per day =400
Lead time for replenishment =2-5 days
Reorder quantity =2200
What is the maximum level of stock
Please solveRe-order level + re-order quantity -(minimum usage × minimum lead time)
Reorder level- this needs to cover maximum demand together with longest lead time to ensure no stockouts.
Reorder level = 400x 5= 2000
Substituting the values into the first equation gives
2000 + 2200 – (2 x 200)
4400 – 400 = 4000 is the maximum level of stock.
I am curious where you obtained the question. A problem I have spotted in the numbers you have given is that the average usage per day at 100 is less than the minimum usage per day. This seems nonsensical.
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