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 solve
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MACost
Re-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.
Could you please check the figures you have given.
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