The following information is available for a component in use at TQR Ltd. : Normal usage 150 units per month Maximum usage 250 units per month Minimum usage 50 units per month Economic Order Quantity (EOQ) 1000 units Lea

Reorder level = Max consumption x Max Reorder period = 250 units/month x 2 months = 500 units Maximum level = Reorder level + Reorder Quantity - (Min consumption x Minimum delivery period) = 500 + 1000 - (50 x 1) = 500 + 1000 - 50 = 1450 units Normal consumption = (250+50)/2 = 150 units Minimum Level = Reorder level - (Normal consumption x Normal Delivery Period) = 500 - (150 x 1.5) = 500 - 225 = 275 units Average level = (Maximum level + Minimum level) / 2 = (1450+275)/2 = 862.5 units Note: If ROQ is not given, we consider EOQ as ROQ.