Discussion
Which of the following statement/s is/are correct?
Formulae-1: Maximum Level = Re-order Level (ROL) + Re-order quantity (ROQ) - (Minimum Rate of Consumption × Minimum Re-order Period)
Formulae -2: Minimum Level = Re-order Level (ROL) - (Normal rate of Consumption × Normal Re-order Period)
Answer: C
Both formulae are correct. In material control the maximum level is the re-order level plus the re-order quantity, less the product of the minimum consumption rate and the minimum re-order period; this is the highest stock the store should hold. The minimum level is the re-order level less the product of the normal consumption rate and the normal re-order period; this is the stock below which it should not fall. Since both are stated in the standard way, the answer is that both are correct.
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