## Minimum Stock Level

The Minimum Stock is the least amount of stock available at any point of time during normal operations — typically just before a fresh order arrives, after average consumption during average lead time.

### Formula

$$\text{Minimum Stock} = \text{Re-Order Level} - (\text{Average Consumption} \times \text{Average Lead Time})$$

### Logic

Stock was at ROL when we placed the order.
On average, avg consumption × avg lead time is used during the wait.
What's left is the minimum buffer the firm should target.

⚠️ Common exam mistakes

Treating the result as zero — minimum stock is a positive buffer, not a stock-out level.
Using min consumption × min lead time (that's part of maximum stock formula).

Reference:

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Minimum Stock Level

Worked example

⚠️ Common exam mistakes