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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 unitswhat is the maximum inventory level?
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.
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