By Maximum Stock Level?

What is Maximum Stock Level? The maximum stock level is a not-to-exceed amount used for inventory planning. This stock level is based on a calculation of the cost of storage, standard order quantities, and the risk of inventory becoming obsolete or spoiling with the passage of time.

Which formula is maximum stock level?

Maximum Stock Level = Reordering Level + Reorder Quantity – (Minimum Consumption x Reorder period) = 3,000 + 1,600 – (120 X 10) = 3,000 + 1,600 – 1,200 = 2,400 units.

How do you find maximum inventory level?

Based on the number of units you expect to sell during the replenishment lead time, and the demand and supply variation, the maximum level of inventory you should hold is: Expected sales + demand variation safety stock + supply variation safety stock.