Dear all
I knw d formula of Re-order level that is
Max. usage*Max. lead time consumption=Re-order level
but in practically how re-order level will work?
suppose i have to set re-order level for an item ABC
Max. usage is for the item is 500 KG per week
Max. lead time conumpstion is 5 days then what would be answer??
Pl. clarify!
Hi Kumar Gaurav,
Re-order level is the level at which the new order for supply of materrials to be placed.
In the eg u had given Reorder level is 12500Kg(500*5). When ur stock level reaches 12500units u need to place the next order to avoid shortage.
Hope ur query is answered.
Thanks Dear!
I got it.
Welcome Kumar Gaurav and Shalini :-)
CAclubindia
