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What Is Minimum Level? |
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Answer» It REPRESENTS the lowest quantity of a PARTICULAR material below which stock should not be allowed to fall. This level MUST be maintained at every time so that production is not held up due to shortage of any material.It is that level of inventories of which a fresh order must be placed to replenish the stock. This level is usually determined through the following formula: Minimum Level = Re-ordering level's (Normal rate of consumption X Normal delivery PERIOD) It represents the lowest quantity of a particular material below which stock should not be allowed to fall. This level must be maintained at every time so that production is not held up due to shortage of any material.It is that level of inventories of which a fresh order must be placed to replenish the stock. This level is usually determined through the following formula: Minimum Level = Re-ordering level's (Normal rate of consumption x Normal delivery period) |
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