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Stock Level

The document discusses reorder levels, minimum stock levels, maximum stock levels, and average stock levels. It provides formulas for calculating each and works through an example using given usage rates, reorder periods, and quantities.

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Anuj Singh
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27 views

Stock Level

The document discusses reorder levels, minimum stock levels, maximum stock levels, and average stock levels. It provides formulas for calculating each and works through an example using given usage rates, reorder periods, and quantities.

Uploaded by

Anuj Singh
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Re-order level = (Max. Consumption × Max.

Re-order Period)
 Minimum Stock Level = Reorder level – (Normal Consumption x
Normal reorder period)
 Maximum Stock Level = Re-order level + Re-order Quantity –
(Mini. Consumption × Mini Re-order Period)
 Average Stock Level = 1/2 (Mini. Stock level + Max. Stock level).
Q1. Normal usage 200 units, Minimum Usage 100 units, Maximum
Usage 300 units, Reorder quantity 750 units, Reorder period= 2 to 3
months
1. Reorder level= (300 * 3) = 900 units
2. Minimum Stock Level = 900- (200 * 2.5) = 400 UNITS
3. MAXIMUM STOCK LEVEL= 900 + 750- (100 *2)= 1,450 units
4. Average stock level= ½ (400 + 1,450)= 925 units

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