Target inventory level is, in a min-max inventory system, the equivalent of the maximum. The target inventory is equal to the order point plus a variable order quantity.

Calculation of Target Inventory Level

TI = d(RP+L)+SS

Here, d= Average period demand

RP= Review period(days,weeks)

         L= Lead time (days, weeks)

        SS= Safety Stock

Get more definitions about Target inventory level and other ERP related terms here.


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