How to calculate Minimum stock, maximum stock and reorder level quantity while doing material purchase.


veearrgee

You will need to know sales, how long to get more stock from your supplier. If your peak sales were 10 units a month, and it takes two months to get more product then you would need a minimun of 20 units. Sales typically are not stable week to week or month to month, so your inventory needs will change with the seasons. Ordering material to arrive as you need it is Just in Time inventory, this is extremely difficult to do without a lot of history on product sales.
You want your inventory to be a low as possible, but high enough so you never lose a sale due to an out of stock situation.
Good Luck!

Have you looked into a MRP system? This type of system will do all the calculations for you once you feed in stocking levels and usage.