Reorder level
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Robbie_R
Registered Posts: 1
Hi
I would be grateful if someone could confirm the correct formula for the Reorder level as both BPP and Osbornes are giving two different formulas.
BPP states: Reorder level = (max usage x max lead time) + Buffer
Osbornes states: Reorder level = (average usage x average lead time) + Buffer
I would assume BPP is correct as the formula for Minimum Inventory Level = reorder level – (average usage x average lead time).
Therefore under Osbornes thinking MIL = reorder level – reorder level which would always = 0 and doesn't really make sense.
I have emailed AAT but not received a response as yet.
Thanks!
I would be grateful if someone could confirm the correct formula for the Reorder level as both BPP and Osbornes are giving two different formulas.
BPP states: Reorder level = (max usage x max lead time) + Buffer
Osbornes states: Reorder level = (average usage x average lead time) + Buffer
I would assume BPP is correct as the formula for Minimum Inventory Level = reorder level – (average usage x average lead time).
Therefore under Osbornes thinking MIL = reorder level – reorder level which would always = 0 and doesn't really make sense.
I have emailed AAT but not received a response as yet.
Thanks!
0
Comments
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In my text book, which is Kaplan, it is the same as your BPP one. Surprised that not even an AAT person has responded to your post.0
