Inventory management

Stock control is best explained using a diagram, for example a bar gate stock graph:

Maximum inventory level: the largest amount of items to be stored on site (500).
Minimum inventory level: the lowest amount of items to be stored on site (100).
Re-order quantity: the amount of stock ordered to restore inventory levels to their maximum point (400).
Re-order level: the level of inventory at which new stock is ordered (300). 400 items are ordered and it takes two weeks lead time for ordered stock to arrive.
Lead time is the amount of time taken between ordering stock and the stock being delivered.
There is always a buffer inventory of 100 items held in case deliveries are held up or there is an unexpected large order.

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