WC – Managing Inventory Levels – Average Inventory

This topic has 2 replies, 2 voices, and was last updated 9 years ago by John Moffat.

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January 17, 2017 at 2:50 am #367823
cgallacher88
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Good Morning,

A little confused on the following formula;

AVG INV = Buffer Safety Inventory + (Re-order amount/2).

Question: The other Min & Max use the word Re-Order Level inside their formula. What does Re-Order Amount stand for, i.e Is it Reorder Qty, Reorder Level, EOQ etc?

Possibly should tackle some questions before posting but hey ho, first post and I’m sure I will learn the game as I go along…

Thanks in advance to any en-lighteners…

Craig G
January 17, 2017 at 3:06 am #367826
cgallacher88
Member
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Sorry Guys, should have taken my own advice. Just found the answer whilst doing a question….

For the record —> Its Re-Order Qty.

I wish BPP would have just kept it simple by sticking with same names as a wee bit deceiving using Qty in the MIN & MAX and then amount in the Average.

All they would then have to advise us students is that Amt and Qty can be used interchangeably as terminology but mean the exact same thing……
January 17, 2017 at 4:13 pm #367962
John Moffat
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What you are saying in your second post is correct.

However the chances of being asked this sort of question in F9 is small – EOQ is asked, but there is little chance of being asked about re-order levels (it is a Paper F2 topic).
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