Since both stocks are reordered when the inventory level reaches the respective reorder levels
, then we can assume that when reorder materializes, inventory levels of each stock are brought to their maximum level.
The most common way to calculate the reorder stock level is: Reorder level
= Average daily usage rate x lead-time in days.
* The predetermined threshold level and reorder level are considered to percentage of replenishment quantity 'Q'.
For each test problem, we have varied the reorder level and threshold stock level and run 25 instances.
* Increase in the reorder level at fillers with two multi-skilled materials handlers under normal and increased demand levels.
* Increase in the reorder level at fillers with three and four multi-skilled materials handlers (tested under increased demand).
The system generates real-time reports of complete inventory, that can be anything ranging from exact stock balances of each item, reorder levels
, credit limit balance of specific vendors, goods that are in transit, and so on.
In his inventory system (a self-designed computer program), Poulos ties reorder levels
to sales by looking forward and back three months rather than year to year.
The company also said that despite the good snow conditions in most of the important winter sports markets during December, last year's reorder levels
of winter sports equipment remained low.
"Our standard reports not only provide information on the current stock situation, but give analysis of usage--down to individual machine tool level if necessary--enabling us to continually build information so the optimum reorder levels
can be specified," he adds.