Q209
Re-order level is calculated as:
A.
Maximum consumption x Maximum re-order period
AnswerB.
Minimum consumption x Minimum re-order period
C.
1/2 of (Minimum + Maximum consumption)
D.
Maximum level - Minimum level
Answer: Option A
Solution
Answer: Option A
Solution:
Re-order level is calculated as Maximum consumption x Maximum re-order period. To calculate the reorder level, multiply the average daily usage rate by the lead time in days for an inventory item.