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Reorder Level and safety inventory

This topic has 3 replies, 3 voices, and was last updated 11 years ago by josy87.

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May 7, 2014 at 5:21 am #167715
Jotsna
Member
- Topics: 1
- Replies: 0
Hello Sir,
I’m having problems with reorder levels calculation. Please help me with this question.
The following data relate to inventory item
A452:
Average usage 100 units/day
Min usage 60 units/ day
Max usage 130 units/ day
Lead time 20-26 days
EOQ 4000 units
what is the maximum inventory level?
May 18, 2014 at 2:39 am #169262
josy87
Member
- Topics: 172
- Replies: 215
Hi
As sir John has not answered you yet, this what I think;
1- reorder level = max usage X max lead time
130 x 26 = 3,380 units
2- maximum inventory level= reorder level + reorder quantity(EOQ)- (min usage x min lead time)
3 380+ 4000 – (60 x 20) = 6180 units.
Hope Im right, lets wait 4 Sir John’s opinion.
May 18, 2014 at 1:57 pm #169301
michealjames
Participant
- Topics: 1
- Replies: 11
Your answer is correct.
May 22, 2014 at 5:40 pm #170181
josy87
Member
- Topics: 172
- Replies: 215
thx
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