How to define min- max-rol level for inventory

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Min-max-rol level for inventory is defined based on demand, lead time, and safety stock.

Min level is the minimum quantity of inventory required to avoid stockouts.
Max level is the maximum quantity of inventory required to avoid overstocking.
Rol level is the quantity of inventory to be ordered when the stock level reaches the reorder point.
Demand, lead time, and safety stock are the key factors to determine the min-max-rol level.
Demand forecasting helps to estimate the required inventory level.
Lead time is the time taken to receive the inventory after placing the order.
Safety stock is the buffer inventory kept to avoid stockouts due to unexpected demand or delay in lead time.
Min-max-rol level can be calculated using the formula: Rol level = Max level - (Current inventory level + On-order inventory level)
Regular review and adjustment of min-max-rol level are necessary to optimize inventory management.

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