also calculate danger level. When this level
of stock is reached, then emergency steps are taken
by the management to acquire material supplies.
When danger level
is reached, the try is made to purchase materials
from the nearest possible source or place so that
the workers and plant and machinery may not remain
idle due to shortage of materials supplies.
can be calculated by the help of the following
formula or equation:
level = Average daily requirement × Time required to
or average requirement
700 units per
800 units per
600 units per
25 to 30 days
to receive emergency supplies
Calculate danger level.
level = Average daily requirement ×
Time required to get emergency