this term is related with material of subject cost accounting
What's difference between re-ordering level and re-ordering quantity?
- Posted:
- 3+ months ago by khalid979...
- Topics:
- level, material, cost, subject, accounting
Details:
Answers (1)
re-order level is the level of stocks you hold when you need to place an order so that you avoid the risk of getting out of stock (calculated depending on the specific conditions of the business, but generally is expected usage over a defined period of time combined with optimum order quantity)
re-ordering quantity is the quantity you order which should be a order optimum quantity: the quantity which, given your usage needs, will give you best balance between quantity discounts, freight and storage costs and working capital financing cost.