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  4.4 Reorder level
  The re-order level is the level of stockholding at which a fresh order is placed with a supplier.
  Re-order level = maximum supply lead time (in days or weeks) maximum daily or weekly demand for the item.
 
  Example :
  The daily demand for stock item is expected to be not less than 60 tons and not more than 100 tons. The lead time between placing an order and receiving delivery from the supplier will be between one and three days. What should be the re-order level?
 
  Solution:
  Minimum demand = 60 Maximum demand = 100
  Minimum lead time = 1 days Maximum lead time = 3 days
  Reorder level = 100 tons x 3 days = 300 tons
 
  What stock control system to use?
  Minimum stock level
  The minimum stock level for an item of stock is a warning level.
  Minimum stock level = re-order level – (average demand for the item each day/month x average length of lead time in days/months)
 
  Maximum stock level
  The maximum stock level is a stock level that should never be exceeded.
  Maximum stock level = reorder level + reorder quantity – (minimum usage per day x Minimum lead time per order)
 
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