•Buffer stock= {Average lead time}x{Average usage rate}.
•Safety stock= Average usage during the extension of lead time.
•Reserve stock= Excess usage requirement during the average lead time.
•Re-order level= B.S.+ S.S.+ R.S.
•Minimum Inventory Level= S.S.+R.S.
•Max. Inventory Level= {Minimum Level} + {Order quantity}
•Average Inventory Level= (Min. level+Max.level)/ 2
• In case of periodic review the buffer stock will be modified to {Average consumption rate}x{Average lead time+Review period}
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