When to reorder stock: reorder level and buffer stock
Order too late and the workshop stops. Order too much and cash sits on a shelf. Work out the reorder, minimum and maximum levels.
Task 1The reorder level2 questions
A delivery never arrives the moment it is ordered. The time from placing an order to the goods arriving is the lead time.
The reorder level is the balance in the store at which a new order is placed. It is set so the store does not run out, even when usage is at its highest and the delivery is as slow as it ever is.
- Reorder level: the highest usage in a week, times the longest lead time in weeks
- When the balance falls to the reorder level or below, an order is placed
| Figure | Lowest | Highest |
|---|---|---|
| Legs used in a week | 30 | 60 |
| Lead time in weeks | 2 | 4 |
Each order is for 400 legs. This is the reorder quantity.
Task 2Buffer stock: the minimum level3 questions
You work out a figure and match pairs.
Task 3The maximum level3 questions
You work out a figure, sort items into the right place and find the mistake in a table.