Reorder Level
Inventory quantity triggering new order placement.
Formula
Reorder Level = Lead Time (days) × Daily Usage Rate
Real World
A McDonald's franchise sets its burger patty reorder level so that a new delivery arrives before stock drops to zero, even if the supplier takes two days to deliver during a busy period.
Exam Focus
Show your working on reorder level calculations and state the assumption about lead time — marks are awarded for method.
How well did you know this?