Question
PQR Ltd consumes a minimum of 1250 units in 4 weeks
while the average rate of consumption per week is 625 units. If it takes 4 weeks on average for the supplier to deliver the inventory, what should be the re-order level for PQR Ltd?Solution
Re-order level = Minimum Stock + (Average consumption * average delivery time) Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â = 1250 + (625*4) Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â = 3750
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