Minimum Stock Level
Lowest inventory quantity; triggers reordering.
Formula
Minimum Stock Level = (Maximum Daily Usage × Maximum Lead Time) − (Average Daily Usage × Average Lead Time)
Real World
Apple maintains a minimum stock level for key iPhone components like OLED screens so that even if a supplier is delayed, production can continue without halting the assembly line.
Exam Focus
Confusing minimum stock level with reorder level is a common error — minimum stock is the safety buffer, reorder level is when you place the order.
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