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re order level

Forums › ACCA Forums › ACCA MA Management Accounting Forums › re order level

  • This topic has 1 reply, 2 voices, and was last updated 14 years ago by John Moffat.
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  • March 2, 2012 at 6:10 am #51680
    m1n2b3v
    Member
    • Topics: 3
    • Replies: 2
    • ☆

    hi everyone,
    if average daily use 400,max use 520, min use 180,lead time 10 to 15 days and reorder quantity 8000…………whether i will calculate ROL by average formulae or the max formulae,……………..???

    March 2, 2012 at 11:35 am #95038
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54831
    • ☆☆☆☆☆

    If they want to avoid any chance of stock outs, then the reorder level should be the maximum lead time x the maximum demand per day.
    (i.e. 15 x 520 = 7800)

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