## Stock Levels (Quantitative Inventory Control)
These pre-set levels signal when to order and how much stock to hold.
### A. Re-Order Level (ROL)
$$ROL = \text{Maximum Consumption per period} \times \text{Maximum Lead Time}$$
- Lies between minimum and maximum levels.
- The level at which a fresh order is placed; ensures enough stock on hand to cover normal and abnormal consumption until the new order arrives.
### B. Minimum Stock Level
$$\text{Minimum} = ROL - (\text{Average Rate of Consumption} \times \text{Average Re-Order Period})$$
- The lowest level that must be maintained so production never stops for want of inventory (safety/buffer stock).
### C. Maximum Stock Level
$$\text{Maximum} = ROL + ROQ - (\text{Minimum Rate of Consumption} \times \text{Minimum Lead Time})$$
- The highest quantity to hold. Stock beyond this wastes funds and adds storage/obsolescence cost. (ROQ = Re-Order Quantity, usually the EOQ.)
### D. Average Inventory Level
$$\text{Average} = \dfrac{\text{Minimum Level} + \text{Maximum Level}}{2} \quad \text{or} \quad \text{Minimum Level} + \tfrac{1}{2}\,ROQ$$
- The quantity normally held over a period (a.k.a. normal stock level).
### E. Danger Level
$$\text{Danger Level} = \text{Average Consumption} \times \text{Lead Time for Emergency Purchases}$$
- Below this, normal issues stop and only emergency issues are made.
Direction check: ROL and Maximum use maximum figures (pessimistic for stock-out); Minimum and Danger use average consumption; Maximum subtracts the minimum consumption × minimum lead time.