Inventory Stock Levels

Comprised of base inventory level and target inventory level. Base inventory level is made up of aggregate lot-size inventory plus the aggregate safety stock inventory. It does not take into account the anticipation inventory that will result from the production plan. The base inventory level should be known before the production plan is made. The target inventory is equal to the order point plus a variable order quantity. It is often called an order-up-to inventory level and is used in a periodic review system. Source: (10th ed.)

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