Reorder Level - How do you calculate reorder level?

Q: How do you calculate reorder level?

To calculate the reorder level, multiply the average daily usage rate by the lead time in days for an inventory item. For example, Wilberforce Products experiences average daily usage of its black widget of 100 units, and the lead time for procuring new units is eight days.

Answer

Simply multiply the average daily consumption rate by the inventory item's lead time in days to get the reorder level. As an example, Wilberforce Products' black widget is used 100 times a day on average, and new units take eight days to be procured.

Reorder Level - How do you calculate reorder level?

Other useful ERP terms

AI suggestions