Q.From the following data, calculate

This is a straightforward application of the five stock-level formulas to the given consumption and lead-time figures.

Re-order Level = Maximum Consumption × Maximum Re-order Period = 200 × 15 = 3,000 units. Normal Re-order Period = (10+15)/2 = 12.5 days, so Minimum Level = 3,000 − (150 × 12.5) = 3,000 − 1,875 = 1,125 units. Maximum Level = 3,000 + 2,500 − (100 × 10) = 5,500 − 1,000 = 4,500 units. Average Stock Level = 1,125 + (2,500 ÷ 2) = 1,125 + 1,250 = 2, …

1. Re-order Level = Maximum Consumption × Maximum Re-order Period = 200 units × 15 days = 3,000 units
2. Minimum Level = Re-order Level − (Normal Consumption × Normal Re-order Period) Normal Re-order Period = (Minimum period + Maximum period) ÷ 2 = (10 + 15) ÷ 2 = 12.5 days = 3,000 − (150 × 12.5) = 3,000 − 1,875 = 1,125 units
3. Maximum Level = Re-order Level + Re-order Quantity − (Minimum Consumption × Minimum Re-order Period) = 3,000 + 2,500 − (100 × 10) = 5,500 − 1,000 = 4,500 units
4. Average Stock Level = Minimum Level + ½ × Re-order Quantity = 1,125 + (2,500 ÷ 2) = 1,125 + 1,250 = 2,375 units
5. Danger Level = Average Consumption × Lead Time for Emergency Purchase = 150 × 4 = 600 units …

Working the Minimum and Maximum Level formulas in two clearly separate steps — first computing the bracketed (Consumption × Period) term, then applying it to the Re-order Leve …

A very common slip is using the Maximum re-order period (15 days) instead of the Normal (average) re-order period (12.5 days) inside the Minimum Level formula, or vice-versa for Maximum Level, which sp …