Data relating to a particular stores item are as follows:
Average daily usage
400 units
Maximum daily usage
520 units
Minimum daily usage
180 units
Lead time for replenishment of inventory
10 to 15 days
Reorder quantity
8,000 units
What is the reorder level (in units) which avoids stockouts (running out of inventory)?
________
The correct answer is: 7,800 units
Reorder level
maximum usage × maximum lead time
520 × 15
7,800 units
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