*****LEARN*****

Question 1

Inventory buffer / min level

Set by management

Answer 1

Re-order level - (ave useage x ave lead time)

Question 2

Max Re-order quantity

Min Re-order quantity

Answer 2

Max inventory level - buffer

Re-order level - buffer

Question 3

Max inventory level: (from open tuition and Gareth John)

(Think of graph..we reorder at reorder lev but there is going to be some useage during the lead time).

Answer 3

Reorder level - (min usage x min lead time) + reorder qty (EOQ)

There may also be a max storage

Question 4

Reorder level (usually need to start here)

Answer 4

Max usage x Max lead time (Gareth John)
Max usage x Max lead time (+ buffer if cautious) (Open tuition)
Ave usage x Ave lead time + buffer (Osborne.. comes out the same)

Question 5

Min inventory level:

Max inventory level:
Gareth John

Answer 5

Where we think inventory might fall to before supplier turns up with other delivery.

So we can make sure we have storage

Question 6

Min inventory calc (Gareth John .. says ‘min’ is a bit misleading)

This is also called buffer stock (Osborne)

Answer 6

Reorder level - (ave usage x ave lead time)