Reorder level

Robbie_R

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!

September

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.