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Minimum order level

This topic has 1 reply, 2 voices, and was last updated 10 years ago by mrjonbain.

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April 5, 2015 at 2:18 pm #240191
Shanda
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Can the minimum order level be calculated by multipying the minium demand by the minimum lead time? I have a different formula from a text I want to know if this one above is also accurate.
April 5, 2015 at 5:26 pm #240210
mrjonbain
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I don’t think your formula would be applicable.It would only not cause a stockout where demand was at lowest predicted level after placing an order AND the lead time was at shortest predicted time after placing order.In other words a very unlikely circumstance.
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