Stock reorder level, help.

sunny

Hi,
I got two different formulas of Stock Reorder level, could some smart guy tell me which one is the right one?

1. Reorder level= Maximum usage x Maximum lead time

2. Reorder level= Buffer stock level + (Budgeted usage x Maximum lead time)

Both of them were showed in my textbook, It's too late to send an email to my tutor. Tomorrow is the exam day, Could anyone help me?
:confused1:

Saff

Stock re-order level:

= Buffer stock + (Max usage x Max lead time)

Hope this helps.

sunny

Thank You, dear.:thumbup1:

But it looks like a different one. One more :laugh: I hope no question of reorder in the exam.

sunny

HI
got the answer in the answer paper for DEC 05, Task1.2. They used the formula:
Reorder level= buffer level+(budegted usage x Maximum lead time)
Hope it could be helpful to somebody.