A) Maximum consumption x Maximum re-order period
B) Minimum consumption x Minimum re-order period
C) 1/2 of (Minimum + Maximum consumption)
D) Maximum level – Minimum level
✅ ANSWER: A
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.
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.