Re-order levels

amandagarratt

Hi just after some clarification, in Management Accounting: Costing how is the re-order level calculated? I ask this as in BPP and Kaplan it is calculated as: (Max usage x Max lead time) + Buffer however in Osborne books and the Mindful Education resources they calculate it as (Average usage x Average lead time) + Buffer. This is quite confusing to my students. Does it depend on the question asked and what information they are provided with? Thanks