Maximum stock level

Maximum stock level,

Definition of Maximum stock level:

  1. The amount of inventory which should not be exceeded. The limit is normally determined after considering storage space of the facilities, how quickly inventory is sold or used, cost of insurance on inventory, and the risk of inventory becoming outdated before it is used. Some businesses use a formula to calculate the maximum stock level:

    Maximum limit or level = Re-order level or ordering point - Minimum usage * Minimum re-order period + Economic order quantity.

Meaning of Maximum stock level & Maximum stock level Definition