Final answer:
When one-for-one stock requisitioning is not needed, the adjusted minimum level that should be used is the reorder point. When stock requisitioning does not require a one-for-one approach, the adjusted minimum should be the safety stock level, which depends on the average demand and variation in demand and lead time.
Step-by-step explanation:
When one-for-one stock requisitioning is not needed, the adjusted minimum level that should be used is the reorder point.
The reorder point is the level at which a new order should be placed in order to replenish the inventory and maintain a desired level of stock. It takes into account factors such as lead time, demand variability, and safety stock.
For example, if a business normally sells 100 units of a product per week and it takes 2 weeks to receive a new order, the reorder point would be 200 units (100 units/week x 2 weeks).
When stock requisitioning does not require a one-for-one approach, the adjusted minimum should be the safety stock level, which depends on the average demand and variation in demand and lead time.
When one-for-one stock requisitioning is not needed, an adjusted minimum level, often referred to as the safety stock level, should be used. This level is calculated based on the average demand during the lead time and the variation in demand and lead time. A common formula used to determine this level is to calculate the average lead time demand and then add the safety stock, which accounts for variability in demand and supply chain disruptions. If the variability is high or the cost of a stockout is significant, then a higher safety stock might be necessary to avoid stockouts. Conversely, if the variability is low and the stockout cost is not critical, then a lower safety stock could be employed.