Average Stock Level Formula

Average Stock Level Formula

Average Stock level is calculated by the following formula. There are three stock level an organization can maintain i.e. minimum stock level, maximum stock level and average stock level.

Average Stock= Minimum level + (Reorder level/2)

Example

Minimum level = 15,000

Re order level = 20,000

Calculate Average Stock Level?

Solution

Average Stock= Minimum level + (Reorder level/2)

= 15,000 + (20,000/2)

= 25,000 (Average Stock Level)

Average Stock level is offer a balanced solution, and therefore is preferred by much organization.