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Calculate the reorder level 1. Calculate the maximum level of inventory 2. Calculate the minimum (buffer) inventory level

Calculate the reorder level 1. Calculate the maximum level of inventory 2. Calculate the minimum (buffer) inventory level

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Jack Ltd is a market leader in the manufacture of apple juice. They operate a reorder level system of inventory management, and the following information is available for green apples:

Average usage                                      800 per day
Minimum usage                                     540 per day
Maximum usage                                    1260 per day
Lead time for replenishment                  16 - 20 per day
 Reorder quantity                                    19,500 apples

 

a. Calculate the reorder level

1. Calculate the maximum level of inventory

2. Calculate the minimum (buffer) inventory level

 

 

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