Cost accounting-material cost
This query is : Resolved
07 May 2013
is NORMAL DELIVERY TIME and RE-ORDER PERIOD same concepts?
09 May 2013
No. Normal delivery time is the time to which receive the materials after place the order but re order period is purely depend upon the requirement of the materials based on production
10 May 2013
sir but we do take lead time while calculating maximun level.....like if lead time is 6-8 weeks we place it at min re order period as 6......
eg:
max level=reorder level+reorder quantity-(min usage*min lead time or min reorder period)
max level=x+y-(Z*6)
sir in the above ques we take lead time as min order period.....why so???
eg:
max level=reorder level+reorder quantity-(min usage*min lead time or min reorder period)
max level=x+y-(Z*6)
sir in the above ques we take lead time as min order period.....why so???
11 May 2013
Basically Lead time means the time that lapses between placing an order and receiving that order. In your formula itself you have mentioned the minimum order period, not normal order period. minimum order period is the deadline requirement to receive the materials.when calculating the reorder time we cannot take directly the normal lead or delivery time.
Message likes :
1 times
11 May 2013
ok thank you sir..
with kind regards
Mansi
with kind regards
Mansi
22 June 2013
Are you talking for finished goods or raw material for both there is difference. The experts have correctly explained about the finished goods.
24 June 2013
yes sir i was talking about finished goods only....
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