ECR--Calculate the major control level?

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yunfei
yunfei Registered Posts: 9 New contributor 🐸
in AAT Level 3 (Level 6 in Scotland)
Hi,all,

need help at this exercise,

Given situation:
average usage: 100 units /day
minimum usage: 60 units /day
maximum usage: 130 units /day
Lead time: 20-26 days
E.O.Q.: 400 units

you are require to Calculate: re-order level
maximum level
minimum level

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  • Spring Flower
    Spring Flower Registered Posts: 14 New contributor 🐸
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    Hi

    Re-order Level = Max usage x max lead time
    = 130 x 26
    = 3,380

    Minimum Stk level = re-order level - ( avg usage x avg lead time)
    = 3,380 - (100 x 20+26/2)
    = 1,080


    Max stk level = re-order level + re-order quantity( EOQ) - ( min usage x min lead time)
    = 3,380 + 400 - (60 x 20)
    = 2,580
  • yunfei
    yunfei Registered Posts: 9 New contributor 🐸
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    Hi, Spring Flower,Thank u very much!

    At the 1st calculation for re-order level, i even was stucking there by the formula told us:
    Re-order level= (Max usage X Max lead time) + Mini level
    i was looking for to find out the Mini level, but from your answer, Is that means we can omit that --(Mini level) when the situation not given to us?
  • Spring Flower
    Spring Flower Registered Posts: 14 New contributor 🐸
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    Hello,:001_smile:

    Re-order Level = Max usage x Max lead time + Reserve Stock(i.e given in your question,oftenly says additional stock also).

    In your case, No additional stock mentioned.

    Also,as far as I know there is nothing to do with mini level while you calculating re-order level. Still i would recommand that double check with your tutor.
  • yunfei
    yunfei Registered Posts: 9 New contributor 🐸
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    wrote:
    Thanks spring flower, i will see my tutor this saturday, after that i will come back to you with the answers.

    And sorry for the error of the EOQ should be 4000 units.

    How are you doing now? Are you still continue your study? I just take a look of your another early thread. I am studing PLB,ECR and FRA now, i hope i can pass them this June. Hope you also can done your study successfully.

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