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What Is Maximum Level? |
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Answer» Maximum level is the level above which stock should never reach. It is also known as maximum limit's or maximum stock's. The FUNCTION of maximum level is essential to avoid unnecessary blocking up of capital in inventories, losses on account of deterioration and obsolescence of materials,EXTRA OVERHEADS and TEMPTATION to thefts etc. This level can be determined with the following formula. Maximum Stock level = Reordering level + Reordering Maximum level is the level above which stock should never reach. It is also known as maximum limit's or maximum stock's. The function of maximum level is essential to avoid unnecessary blocking up of capital in inventories, losses on account of deterioration and obsolescence of materials,extra overheads and temptation to thefts etc. This level can be determined with the following formula. Maximum Stock level = Reordering level + Reordering |
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